Oil Rallies After IEA Says OPEC Followed Through on Output Cuts

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Oil Rallies After IEA Says OPEC Followed Through on Output Cuts
Both the WTI Crude oil and Brent Crude benchmarks were higher by over 1% this morning after the IEA reported
that the Organization Of Petroleum Exporting Countries (OPEC) had achieved 90% compliance with the production cuts agreed upon by OPEC and non-OPEC countries in December.
OPEC production fell by 1 mb/d to 32.1 mb/d in January, and IEA wrote in its report highlights
that the group has “made a solid start to what is a six-month process.
It explained the oil market is in a “wait-and-see mode,” due to the continued existence of high stocks,
and caution from the markets in assessing the level of output cuts and how other producers might grow production
IEA expects significant increases in production from non-OPEC countries like Brazil, U. S. and Canada that were not a part of the output deal.
Non-member Russia had agreed to significant cuts in phases and preliminary data showed its output was down by 100 kb/d in January.
It also revised demand growth for 2017 upwards by 1.4 mb/d, an increase of 0.1 mb/d from the last report.

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