OPEC plans to diminish output to a range of 32.5 to 33.0 million barrels per day from its current estimated output of 33.24 million barrels per day. While Saudi Arabia, OPEC’s biggest producer, has agreed to reduce output, Iran, Libya and Nigeria might not follow suit.
In addition to OPEC’s production cuts, 11 major oil-producing countries that are not OPEC members also recently agree to pare output.
“Stronger oil prices should benefit North American energy equities, especially the low-cost producers that focus on on-shore projects, we believe,” notes BlackRock. “These producers are better positioned to navigate shorter cycles in the supply-demand dynamics of the oil market. Refiners could benefit too, if global oil demand surprises on the upside. We’d shy away from larger integrated oil companies, as their often costly off-shore projects make them less nimble.”
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