The world oil market is expected to see a partial recovery in 2017 and 2018, in light of the fact that as per the output cut agreement, OPEC members have adjust oil production by 1.2mn barrels per day, and the non-OPEC oil producing countries have reduced their output by 0.6mn bpd in the first half of 2017.
This prediction has been made by the Arab Economic Outlook (AEO), released by the Abu Dhabi-based Arab Monetary Fund (AMF) on Wednesday.
‘The commitment to this agreement will help bring the oil market balance in 2017,’ the AEO said.
In the meantime, oil demand is expected to increase by 1.2mn bpd this year, according to OPEC estimates.
These developments will support oil price increases in 2017 and 2018, compared to levels recorded in 2016 which reached $40.8 per barrel for the OPEC price basket.
‘However, the expected increase in shale oil production due to the price gains will limit the upward trend of oil prices during 2017 and 2018,’ the report said.
