This is a big OPEC’ing deal. While the naysayers said it could not be done, OPEC went ahead and did it anyway. The cartel agreed to cut production by 1.2 million barrels a day(mbd) to 32.5 mbd and has enticed non-OPEC producers to add another 600,000 barrels. Now that the months in making the deal is done, what does this mean for oil as well as the outside market.
Well, first, I don’t think you can doubt OPEC’s commitment to making these cuts work. Not only will they have OPEC countries monitor compliance, they will also have an independent group count the barrels. In other words, they will have monitors montoring the monitors. Kuwait, Venezuela and Algeria will be montoring compliance and a disinterested third party will be keeping score of the barrels produced.
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