Following the decision taken by the Organisation of Petroleum Exporting Countries’ (OPEC) in November to cut production by 1.2m barrels a day – the first agreed cut since 2008 – Abhishek Deshpande, Natixis’ senior oil analyst, offered his oil market forecast to The Economist.
While some speculators believe the production freeze marks the beginning of the end for the global oil market glut, Deshpande believes any continuation of the oil price’s surge is, in fact, reliant on non-OPEC members committing to cut output at a meeting on December 9th.
Deshpande says, “Traders will monitor oil-tanker traffic to ascertain whether fewer are leaving port. They cannot monitor Russia’s pledge to cut 300,000 b/d of production, because much of its production moves by pipeline.”
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