.png)
OPEC and its allies defied market expectations last week and agreed 1.2 million barrels a day of production cuts for 2019, but crude prices are yet to rally. Unlike when a deal was reached to cut supply in 2016, the market is more skeptical this time around about exactly how the Organization of Petroleum Exporting Countries can go about supporting prices. That’s despite Saudi Arabia’s energy minister Khalid Al-Falih announcing Friday that 900,000 barrels a day of the kingdom’s crude will be taken out of the market between November and January, in addition to cuts from OPEC’s allies. The causes of the market’s pessimism are far reaching. Whether it’s a trade war between the U.S. and China potentially curbing global demand, or doubts about exactly how OPEC will deliver the cuts, below are some of the reasons crude markets are yet to get excited about the production cuts. Economic Worries Signs of stress in the global economy haven’t gone unnoticed by oil traders. While crude rallied the most in two years in early December as trade tensions between the U.S. and China appeared to ease, those fears have swiftly returned. The U.S. dollar is trading near its highest level […]
