OPEC members Libya and Nigeria were exempted from the cuts because of years of unrest that have undermined their oil output.
"An external break-even price below the global oil price thus indicates a potential for either additional fiscal spending or currency appreciation; a break-even price above the global oil price indicates an underlying pressure for budget cuts or depreciation, at least in the absence of substantial buffers of reserves or borrowing capacity", Setser and Frank say.
While the research shows some forced adjustment to the era of lower oil prices, it also hints at more pain to come by pouring cold water over the optimism surrounding oil producers' attempts to diversify their economies.
Not only has Libya's oil production rebounded, but it also appears that these gains are not temporary. The prices are still been pressured by evidences of an ongoing fuel glut despite efforts led by OPEC to tighten the market by holding back production. Demand next year is expected to rise 1.4 million bpd to 99.4 million bpd.
The IEA's global supply and demand estimates suggest oil stockpiles should have declined at a rate of 700,000 bpd in the second quarter, but it's uncertain whether that actually happened, the agency said.
Shot at Gender-Reveal Party; 1 Person Dead
Police have released few details about the shooting. "You're hoping that there won't be situations like this", said Love. Witnesses told police they saw the two gunmen run out before driving away in a auto . "There's a pregnant girl here".
The IEA also raised its growth forecast to 1.5 percent this year to 98 million barrels a day from 100,000 barrels estimated last month. That's more than what most OPEC members export. The build in total US petroleum inventories for the week ending June 2 was the largest for any week since 2008.
On Wednesday, July 12, 2017, the EIA (U.S. Energy Information Administration) released its weekly petroleum status report. Even a fresh agreement in May, between the OPEC and participating non-OPEC producers, failed to lift price.
Libya and Nigeria are expected to send representatives to the next meeting of the OPEC and non-OPEC Joint Technical Committee on July 22 in Russia, Barkindo said. US oil production was up by 59,000 barrels a day to almost 9.4 million barrels a day, but it was not all shale. However, recently both countries have ramped up production, feared to offset the cuts implemented by the rest of the group.
In fact, PIRA Energy estimates predict that in three years the United States will export 2.25m barrels a day, against the 2.1m b/d of Kuwait, 1.7m b/d of Nigeria, and 1m b/d of the USA at the beginning of the year. We do not expect any drastic changes next week: bunker prices may continue swinging with no firm trend.
However, market watchers should keep a careful eye on the numbers, because Libya and Nigeria may not actually be required to remove almost as much oil from the market as might be assumed.