Industry at a glance
After months of talks between OPEC countries, aimed at capping oil production, a preliminary agreement was finally reached in late September to cut the cartel’s production to a range of 32.5 MMbpd to 33 MMbpd. This decrease is the first OPEC-approved cutback since the 2008 financial crisis and should be adequate to balance supply and demand until the second half of 2017. The surprise agreement sent crude benchmarks up about 6%. Although, the OPEC accord will provide short-term price support, the lingering inventory surplus will keep the market oversupplied and limit monetary gains. However, price stability has caused operators to put rigs back to work in the high-return U.S. shale plays. In September, the U.S. rig count averaged 506 units, 5% higher than the August tally of 481. The international rig count was up 49 units, to average 1,078 in August.
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