The big story for energy markets in the first half of 2017 will be a stronger-than-expected surge in US shale oil production that keeps the lid on global oil prices.
On Nov. 30, OPEC member states agreed to cut production by a combined 1.2 million barrels per day, led by an almost 500,000 barrels per day cut from Saudi Arabia. Further, major non-OPEC producers agreed to an additional 560,000 barrels per day in curtailments, driven by a 300,000 barrel per day cut from Russia.
As the agreement went into effect, West Texas Intermediate (WTI) oil prices immediately surged from about $45 per barrel just prior to the agreement to early January highs around $55.
Pundits confidently predicted oil will touch levels near $70 by the first half of 2018. However, signs of trouble for the bulls are already evident.