Members of the Organization of the Petroleum Exporting Countries (OPEC) earned revenues of about $1.64 billion a day so far in 2017, a rise of over 10 percent from H2 2016, following the group’s first output cut in eight years, according to Reuters’ calculations.
The cartel’s revenue increased by 43 percent compared to the first half of 2016, when oil prices fell to a 12-year low near $27 a barrel.
OPEC members are expected to see higher income over the rest of the year if the supply glut in global oil markets ends, the agency reported.
OPEC and 11 other leading producers led by Russia agreed in December to cut their combined output by almost 1.8 million barrels per day in the first half of the year. The original deal was to last six months, with the possibility of a six-month extension.
On May 25, OPEC, Russia and other non-OPEC producers agreed to extend the production cuts deal by nine months until the first quarter of 2018.
Despite the output cuts, the oil producers have been struggling to rebalance the market amid rising US shale output, as well as an increase in production from OPEC members Libya and Nigeria, which were exempted from the cuts.
“US oil production growth has reduced the need for OPEC’s oil, but current low prices, if maintained, are likely to affect 2018 growth forecasts as hedging activity slows with some producers unable or unprepared to keep up production at current low prices,” Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank said in a note on Sunday.
“Rising production from Libya and Nigeria has presented an additional headache, but the low hanging fruit has almost been harvested, thereby reducing the risk of a further rapid increase,” he added.
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