OPEC Deals with Greater Supplies after Oil Cuts

Posted April 21, 2017 by IIPartners

Into Investment Partners reports OPEC countries stocks now greater than before production cuts implemented.

When OPEC and Russia convene in May to evaluate the influence of their oil reductions they will meet an unexpected result: supplies are even greater than when the production cuts were initiated.

“Stocks have begun to decrease, but when ministers assemble in Vienna next month, established countries will not have gone through the large over supply produced by a swell in the Organization of Petroleum Exporting Countries production just prior to the implementation of the production cuts,” said Sigmund Wallace at China based INTO Investment Partners

OPEC has been defeated by its own strategy by supporting the efforts to decrease production whilst permitting member countries to continue to increase sales until the agreement was implemented. The cuts, which have now fully come into effect, have been counter balanced by the American shale producers’ efforts.

The agreement towards the end of 2016 between Russia, 10 other oil producing countries and Organization of Petroleum Exporting Countries was meant to increase prices by getting rid of a large stock surplus. This measure has been largely unsuccessful as the surplus persists even months later.

At the end of 2016 sale able oil stores in the 35-country Organization for Economic Cooperation and Development equaled almost 3 billion barrels. That figure increased to 3.06 billion at the beginning of this year, thanks largely to a delayed boost in OPEC shipments prior to the full implementation of the production cuts.

Stocks in the Organization for Economic Cooperation and Development, who is responsible for approximately 50% of the world’s total supply, decreased only marginally in February of 2017 and continued to be high above the 5 year mean.

About Into Investment Partners:

INTO Investment Partners’ bespoke discretionary investment management services have proven particularly attractive to those people who prefer to be kept up-to-date with their investments, but typically do not possess the knowledge or skill to manage their portfolio effectively. Typically, this is owing to a lack of time or, perhaps, a preference for other activities like traveling or retirement. This most comprehensive of services can be tailored to match your exacting requirements, goals and time horizons. For example, a portfolio can be built with regular redemptions in mind to, for instance, pay for children’s tuition fees or to provide additional income to supplement an annuity. It can be constructed with an increased risk profile in order to achieve enhanced levels of capital appreciation for when it may be required at some point in the future.
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Issued By Sarah Walsh
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Categories Finance , Industry , Reports
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Last Updated April 21, 2017