OPEC’s pledge to slash its output by close to 1.8 million barrels a day until June to boost prices that have remained depressed for over two years has so far experienced record compliance from cartel members. However, the production cuts have failed to yield the desired effect as the US continues to ramp up production, more than offsetting the OPEC efforts.
Crude prices have tumbled over -10.00% since the beginning of the year, and more and more OPEC members are now favouring extending the output deal beyond June to stabilize the market. Nevertheless, to reassure markets, OPEC sources remarked that the cartel’s increased support for extending oil supply must be complemented by non-OPEC participation. Front month Brent crude futures bounced off the four-month low near the $50.00 per barrel hit last week, with prices currently hovering just below the $52.00-mark.