“The international oil price fluctuations in the near future, on the one hand and the dollar, the dollar index on Tuesday intraday refresh a new high of nearly 14 years, has since pared some gains due to the negative correlation between crude oil and the dollar to maintain long-term high, so the recent trend of crude oil to a certain impact the dollar volatility; on the other hand, in January. The producers cut into the implementation phase, but the countries’ commitment to implement production is not clear, the market also appears certain differences.” Founder medium-term futures analyst Sui Xiaoying said.

At the end of September 2016, OPEC reached a preliminary agreement to freeze production regulations, OPEC will own production limited to 32 million 500 thousand barrels / day level. The same year the end of November, OPEC specific production share reallocated. At the same time, to Russia as the representative of the non OPEC oil producers have announced the production of 558 thousand barrels / day. As the frozen production finalized, the international crude oil prices rose sharply.

According to the December OPEC2016 monthly forecast, in 2017 a quarter of the world’s total oil demand will reach 94 million 600 thousand barrels / day, non OPEC supply of 56 million 700 thousand barrels / day, the supply of non conventional oil and gas to 6 million 400 thousand barrels / day. If the OPEC will produce a limit of 32 million 500 thousand barrels / day level, global crude oil production reached 95 million 600 thousand barrels of non OPEC still, another 558 thousand barrels, a quarter of the global supply of crude oil in excess of 442 thousand barrels / day level, the previous period significantly ease.

According to Al-Anba reports, Jamal Kuwait National Petroleum Corporation CEO Jaafer said Kuwait has cut 130 thousand barrels / day production to 2 million 750 thousand barrels / day. In addition, Oman television reported, Oman Petroleum Marketing Director Ali Al-Riyami said the country’s November oil production cut by 45 thousand barrels / day to 1 million 14 thousand barrels / day, that some Middle East countries have already begun to cut.

Topix Derivatives Research Institute analyst Jin Xiao pointed out that the recent volatility in oil prices by OPEC whether these affect the production. The market is now caught in a dilemma, on the one hand, the expected OPEC production to support prices, on the other hand is whether the production of OPEC are still skeptical, especially in Libya crude oil production gradually recovering. If the OPEC cannot deliver production, then the supply pressure will increase.

“Because the OPEC no longer yield under the crude oil demand growth is expected to slow, the market generally believes that to the first half of 2018 in the second half of 2017, global oil supply and demand is expected to achieve rebalancing. Of course, it is estimated that the market is more optimistic. In fact, the global oil supply surplus is mainly tight oil technology from the United States as the representative of the mature in the United States caused by the freezing production under the premise, even if the OPEC United Russia frozen, the freezing production behavior for the ability to influence the price of crude oil is also doubtful.” Jinshi futures analyst Huang Liqiang said.

Shale oil will come back