Oil price rally likely short-lived as OPEC deal not enough to reduce glut

The oil price rally sparked by an OPEC-Russia deal to cut output is likely to be short-lived, say traders in Asia, because the agreement may only draw more supplies from storage tanks and more crude shipments from the United States. And even without increased supplies from elsewhere, if the Organization of the Petroleum Exporting Countries (OPEC) and Russia do reduce production by 1.5 million barrels per day (bpd) as pledged, the cuts would not be deep enough to shrink a glut that began to build in mid-2014, traders said. “The cut by OPEC will be largely offset by increases in U.S. production where the rig count has already increased,” said India Oil Corp’s Director of Finance A K Sharma. “So surplus (oil) […]

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