OPEC Extends Oil Production Cuts To End of 2018


OPEC policy confirms a scenario of inventory normalization in 2H18 – UBS

The 30 November OPEC/non-OPEC producer meeting confirmed that quotas will stay in place until end-2018. Our base case remains that OECD inventories will reach 5-year
averages in 3Q18 and around that period we will see a formal or informal tapering of producer action; the deal will also be reviewed in June for adjustment depending on
market conditions. Global economic activity looks to be supportive into 2018 and should translate into another year of good oil demand growth albeit offset somewhat
by higher price headwinds. Non-OPEC growth is dampened by the quota effects but is set to be ~1.2Mb/d in 2018, dominated by the US (~1.2Mb/d of which shale makes up