As for the volume of cuts, the expert said it is most likely that the existing cut levels will be rolled over because to try to re-negotiate each country’s individual number would be time consuming and very difficult.
Talking about the effect of the current OPEC output cut deal, Welch said the price went up as expected and compliance was better than expected.
"But oil inventory data is not yet showing a decline, however, there is a considerable time lag in the availability of some stock data," he added.
The expert noted that the rapid rise in US production is making things difficult for OPEC – it is making it harder to re-balance the oil market and harder to pull down oil inventories, and the US production rises are not going to stop.
Welch concluded that current market situation is as follows: supply and demand is in balance, but demand is not yet exceeding supply.
In December 2016, OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices.
OPEC agreed to slash the output by 1.2 million barrels per day from Jan. 1 with top exporter Saudi Arabia cutting as much as 486,000 barrels per day.
Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce the output by 558,000 barrels per day starting from Jan. 1 for six months, extendable for another six months.
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