The latest OPEC oil production figures continue to show that several countries are overproducing, which is making Saudi Arabia – which has borne the brunt of production cuts – increasingly frustrated. For now, at least, countries are making compensatory cuts (although it’s not clear if some of the serial non-compliers like Nigeria and Angola will continue to do so). In the near term, we doubt that Saudi would revert to its previous policy of raising oil output to regain market share. Indeed, rumours suggest that the deal to cut output could even be extended beyond January (when quotas are set to ease). While that might support prices, it would prolong the drag exerted by oil sectors on overall GDP growth.
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