Oil is getting cheaper. Is the OPEC cartel ready for a new production cuts?

Oil prices fell after publication of data on the growth of drilling activity in the United States. The number of american rigs has doubled since last may and amounted to 652. 10.Apr.17 2:10 AM By Christina Orlina Photo Toinnov.com    540

Data for oilfield services company named Baker Hughes indicates that for the week ended by 24 of March, the number jumped to 21, to its highest since January. During the same period, oil production in the U.S. rose by almost 8.3% to 9.13 million barrels a day. On this background according to the meeting in Kuwait, the Ministers of OPEC and non-cartel countries have not taken a final decision on the extension of the agreement to reduce oil production in the second half of this year. Monitoring Committee recommended that the OPEC to present in April an analysis on the possible extension of the agreement for another six months. OPEC and Russia has almost reached the target level of production cuts in March, following the agreement of 94%, which is 8% higher than in February. The Minister of energy of the Russian Federation Alexander Novak following the meeting of the Committee for monitoring the implementation of conditions for the reduction of production said: “We have the possibility of extending the current agreement for cooperation. But in order to make a decision that is based on good analysis, it takes time. Now, at the end of March, we did not have enough information to assess the current situation on the world oil markets. We will also watch and, depending on the situation, which will be on the market, we will give recommendations.” The next OPEC meeting will take place on 25 May in Vienna. The energy dialogue “Russia – OPEC” (meeting of Ministers of relevant agencies of Russia and the countries belonging to OPEC), will be held in Moscow on May 31.

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