On January 1, Oman began scaling back its petroleum output by 45,000 bpd, honoring its commitment to the deal signed by OPEC and non-OPEC members on December 10 in the hopes of stabilizing oil prices. Under the terms of the deal, the 14 members of the Organization of Petroleum Exporting Countries agree to cut their combined daily output by 1.2 million bpd, while non-OPEC signers will be cutting production by a total of 558,000 bpd. For Hamad al Rumhy, the tiny Gulf sultanate's minister for petroleum and natural gas, ''Oman's contribution is substantial, considering that our daily production will total some 970,000 barrels, compared to over 1 million during the previous period''.
Some observers expect many of the non-OPEC signers and some of the smaller OPEC members to only partially comply with the agreement, but according to Capital Economics analyst Thomas Pugh, ''the cuts have to be substantial enough to help rebalance the market''.
On prices, Reuters polled 29 experts to assess the projected performance of the 2017 oil market. The respondents predict that oil prices will rise but fail to surpass 60 dollars per barrel during the current year. However, they also project that the average price of crude will see constant growth. From the current 53.88 dollars, it should reach 59.68 by the end of the year.
Among the uncertainties in future scenarios is how US president-elect Donald Trump will act. If he succeeds in his plans to drastically reduce the business tax rate and eliminate taxation of US companies’ profits abroad, the oil market (and oil prices) could benefit a great deal.