15 September 2016, Lagos – Even as speculation builds over whether the Organisation of Petroleum Exporting Countries will clinch an output deal with Russia this month, their negotiations are already paying off.
OPEC crude oil production stood at 33.24 million bpd in August, a decrease of 23,000 bpd over the previous month, the 14-member oil cartel said on Monday.
Demand for crude from OPEC will average 32.48 million bpd in 2017, down by 530,000 bpd from the previous forecast, according to the report.
Producers are expected to meet in Algeria on the sidelines of the International Energy Forum from Sept. 26 to 28.
Hedge funds and other investors reversed their bets on falling oil prices at the fastest pace in five months after producers said they would meet in Algiers, data from the US Commodity Futures Trading Commission show, according to Bloomberg.
While skepticism has grown about whether OPEC, whose representatives held a flurry of meetings from Moscow to Paris last week, can overcome internal conflicts, speculative short positions in US crude are still 41 per cent below their August peak.
Oil climbed as much as 16 per cent in the weeks after OPEC announced talks in the Algerian capital, extending a rebound from a four-month low.
While the desire of Iran and Iraq to boost output prompted doubts there will be a deal, crude has held much of the gain, just as prices retained their initial boost from the previous failed attempt to freeze production in Doha in April.