Kuwait: December 11, 2016
At its November 30 meeting, OPEC surprised the markets by announcing a 6-month deal to reduce its output to 32.5 million barrels per day, a cap on Iranian production, and a presumed commitment by non-OPEC members to also cut production. Though some details on implementation and compliance are still missing, the agreement is clearly a serious effort by OPEC to rein in global crude supplies—and the markets certainly reacted favorably to the deal. They pushed Brent well above $50 per barrel ($/bbl), a level that has been hard to sustain so far this year. The GCC equity markets were, of course, helped by the news and rose in the aftermath. It was also good news for US shale producers, and for major central banks trying to shore up inflation.