Oil: OPEC returns, but be wary - Natixis

Research Team at Natixis, notes that yesterday an agreement was reached with the cooperation of all OPEC countries to reduce overall production to 32.5mn b/d, a cut of 1.2mn b/d, according to OPEC from its reference production levels.

Key Quotes

“This cut will be effective from 1 Jan 2016. This reduction will be shared among all OPEC countries with some special considerations – the country-specific adjustments are below and the details are crucial.” 

“There is also appetite for shared responsibility to this supply reduction from both OPEC and non-OPEC countries. These adjustments are set for the next six months and further six months rolling subject to a review on 25 May 2017.”

“Furthermore, a ministerial monitoring committee (consisting of Kuwait, Venezuela and Algeria) has been formed to ensure compliance to the adjustments. This committee will be joined by two other non-OPEC members, names set to be confirmed.”