December 20, 2016
The announcement to cut oil production by OPEC members made earlier this month has resulted in other countries outside the oil cartel following suit.
In an effort to reduce oversupply and boost prices, non-OPEC members, such as Russia, Mexico, Azerbaijan and Oman, have also agreed to cut their output by 558.000 barrels a day. Add to this the 1.2 million bpd cut by the current OPEC members and it’s no surprise that we saw a surge in the price of oil soon after the announcement.
But if we consider that OPEC are currently producing 33 million bpd and this only accounts for about 40% of the world’s crude oil production, these cuts don’t seem as scary. It has been suggested that the price increase in the days around the announcement, may start to level out again.
Only time will tell what affect the planned cuts, due to begin 1st January 2017, will have on the price of oil. But you can keep up to date with our current Heating Oil prices on our website with a free instant quote.