“Almost a dozen non-OPEC producers have agreed to reduce their crude oil output in a bid to support OPEC’s efforts to prop up prices. Among them are Mexico, which has pledged to cut 100,000 bpd from its daily total; Azerbaijan, which agreed to reduce production by 35,000 bpd; and Oman, which will cut 40,000 bpd from its daily output. Kazakhstan also joined the agreement, pledging a 20,000-bpd reduction,” according to OilPrice.com.
Other major oil-producing nations that are not OPEC members but are pledging to curb production include Bahrain, Bolivia, Brunei, Equatorial Guinea, Malaysia, Sudan and South Sudan.
Traders have actually pulled money from oil ETFs with USO bleeding nearly $571 million just this month. BNO is lighter by $6.75 million in December. For supplies to truly dwindle, OPEC needs to deliver on its promised output cuts.
“The stockpile declines will only occur if OPEC reduces supply enough to meet and maintain a target of about 32.7 million barrels a day, the agency said. The organization pumped a record 34.2 million a day in November,” reports Bloomberg.
For more information on the crude oil market, visit our oil category.