Output Deal Could Cut Oil Surplus in Half

On paper, OPEC’s supply deal could drain almost half the global oil glut within six months.

Record inventories accumulated since 2014 will dwindle at a rate of about 760,000 barrels a day in the first half of next year if OPEC and 11 other oil producers deliver the supply cuts pledged on Dec. 10, according to Bloomberg calculations using data from the International Energy Agency. Over the six months covered by the deal, that would remove 46 percent of the 300 million-barrel stockpile surplus OPEC aims to clear.

Reaching that target would require full compliance with the almost 1.8 million-barrel cut promised by the Organization of Petroleum Exporting Countries, Russia and their other allies. That’s an achievement that has eluded previous supply deals.


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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.