Although U.S. oil producers have been hurt from increased OPEC market share and having to lay off workers, the longer-term outlook is improving. The transportation sector also promises opportunities that are not only positive for the labor market but also help the USA reduce dependence on oil and imports from OPEC. "With that continuous demand increase I think all available oils are going to be accommodated".
OPEC members have reached a record compliance of 90% with their agreed output cuts, the International Energy Agency said Friday. Other global producers have agreed to cut output by 558,000 bpd with Russian Federation agreeing to slash 300,000 bpd.
It said it would not forecast what OPEC production will be during the six months covered by the output deal.
Investment in the oil industry has tumbled during the past three years, and a failure to reverse this trend could hurt future supply and cause a shortage three years from now, Al Sada said.
Canada's main stock index rose on Friday to an all-time high on strengthening oil prices and hopes of business-friendly tax cuts in the United States, while a surge in domestic jobs suggested the country's economy was picking up.
Currently, after Russia's victory in Syria, it is precisely geopolitics which is knocking on the door of those who manage oil prices.
In its closely watched monthly report, the agency, which advises industrialized nations on energy policies, said the cartel's production fell by 1 million b/d to 32.06 million b/d in January compared with the previous month.
The IEA's oil market report for February said, "While seaborne oil export data, from which secondary source estimates of OPEC production are mainly derived, are not complete for January and is subject to revision, OPEC nevertheless appears to have made a solid start to what is a six-month process". According to information posted on the homepage of its energy ministry website, Russia's Energy Minister Alexander Novak says that the country reduced its oil production by 117,000 bpd in January.
Other counties, such as Algeria, Venezuela and Iraq, are producing more oil than their quota.
A threat to the deal's success could also come from within OPEC as Libya and Nigeria, which are exempt from the cuts, raise output.
Therefore the current OPEC's policy line is to attract in the cartel, at least indirectly, all the external oil production, by marginally favouring even the USA and Canadian production, which had been the target of the long bearish fight of Middle East oil countries. "There was also data showing that while Chinese imports were down last month, they remain very strong, adding to the rebalancing picture".