Markets Not Convinced as Oil Producers Deliver Cuts

OPEC and its allies are little more than a month away from taking a decision that will define the short-term future of the oil industry: extend crude-output cuts that haven’t really lifted prices, or return to pump-at-will policies that caused a crash. With a third full month of production data now available, the petro-states can at least say they tried to prop up the market.

Ten of the 21 countries that agreed to pump less stayed within their pledged output limits in March, versus five in February. OPEC on the whole cut production by more than required. Non-OPEC members still have far to go, though their efforts improved dramatically last month, preliminary data from the International Energy Agency show. Collectively, the nations are trying to curb output by almost 1.8 million barrels a day, with most of them using October’s production levels as their starting point.

Of the five OPEC members that complied in March with the output agreement, four cut production by more than required, according to the group’s secondary source data. Saudi Arabia again pumped less than the accord permits, and Angola slashed its output by almost twice as much as it needed to do. OPEC members Libya and Nigeria are exempt from the agreement, and Iran is allowed to boost output.

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.