OPEC supporters are losing their patience. After numerous advances in connection with the OPEC agreement, which had to solve the problem of global oil oversupply on the market, asset managers have begun to reduce their positions on the WTI growth. Meanwhile, countries of the cartel and other major producers are reducing production volumes. However, American reserves and production are rising and shale producers launch new drilling rigs. Last two months, the North American benchmark WTI was trading in the range of $50-$55 per barrel.
OPEC, as promised, has demonstrated its determination in respect of agreement on production reduction. It is well known that in past the cartel reluctantly performed its duties, in order not to lose market share and high income. This was confirmed by the former Minister of Energy of Saudi Arabia Ali al-Naimi. In addition, the US producers last week increased the number of active drilling rigs up to its maximum levels for the last 4 years.
According to EIA, oil production in the US rose to 8.98 million barrels a day over the last week. EIA also expects that next year production will reach 9.53 million barrels per day. Hedge funds from 1 to 7 February have reduced the number of long positions by 5.4%, according to Commodity Futures Trading Commission.