The latest OPEC and NOPEC agreement to keep current production restraints in place through 2018 was sufficient, according to a Rigzone poll on social media platform Twitter.
Did the latest OPEC/NOPEC agreement to extend production cuts go far enough?— Rigzone (@Rigzone) 4 December 2017
Fifty-seven percent of the 84 poll participants thought the deal went far enough, compared to 43 percent who felt that more could have been done.
In a previous Rigzone Twitter poll, Rigzone readers revealed that they were initially not very confident that output cuts would be extended at the Nov. 30 meeting, with 32 percent of voters saying they had little hope of a new deal and 21 percent revealing that they thought an extension was downright impossible.
How confident are you that production cuts will be extended at the OPEC meeting on November 30?— Rigzone (@Rigzone) 20 November 2017
In contrast to Rigzone readers, oil and gas analysts said the production cut extension was widely anticipated, which explained the muted immediate oil price reaction. Oil prices are expected to increase in the second half of next year, according to Wood Mackenzie.
As reported by Reuters, there were concerns in the lead up to the meeting that OPEC may only consider a short-term extension to its production cut deal. In relation to that possibility, a 9-month extension covering all of 2018 seems more than sufficient.
OPEC expects a further meeting to take place in June next year to evaluate the agreement, which has concerned some, but Ann-Louise Hittle, Wood Mackenzie vice president of oils research, has dampened these worries by stating this review could actually be warranted "due to several uncertainties that could shift the fundamentals for 2018," including the rate of growth in U.S. oil production.
As described by Michael Burns, oil and gas partner at law firm Ashurst, the latest OPEC/NOPEC agreement was a "key deal that will give reassurance to the market."
Hopefully it will stabilize prices in the short term and help prove analyst predictions of an oil price rise in the second half of 2018 right.