Executive Summary: Oil market outlook
Global oil prices are expected to remain volatile in the next few months as market participants look ahead to the degree of implementation of production cuts agreed by OPEC and some non-OPEC members. Meanwhile, rising oil output from the United States will continue to exert pressure on prices. The Brent crude front-month futures price has averaged $55.7/bbl so far in January 2017, marginally higher than December 2016’s average of $54.9/bbl. GGA forecasts the price will average $55/bbl in 2017.
Recent comments from some OPEC member countries suggest they are implementing a deal reached in November 2016 whereby the cartel will cap its output at 32.5 million barrels per day (MMb/d), effective from 1 January 2017. OPEC’s January production figure will be published in its monthly oil market report, due on 13 February.