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A recent survey conducted by Reuters found that OPEC oil output has dropped during the month of November from October by 110,000 barrels per day (bpd). The cause is from Angola Production fell due to maintenance, along with Saudi Arabia halted supply output before the initial public offering of state-owned Saudi Aramco.

Oil prices continue to be range bound until the market bulls or bears take control. As of this morning, there were more bullish than bearish factors which is resulting in green across the board for the moment.

Many concerns have been raised recently that brings into question the vulnerability of global oil supply. From the upcoming sanctions on Iran, which are expected to make waves in the fourth quarter, to the drop in Venezuelan exports, much is left to be determined. With these challenges at the forefront of ensuring a steady supply of oil to markets around the world, one cannot help but raise a curious eyebrow at unconventional oil extraction methods, even if they previously had been brushed off.

On Saturday OPEC and non-OPEC producers agreed to raise production by 1 million barrels per day (bpd). Perhaps more important than that, they agreed to return to 100% compliance of the previously agreed upon production cuts of 1.8 million bpd. Production was lagging from struggling countries, i.e., Venezuela, Angola and Libya which effectively equated to a production cut of 2.8 million bpd. Most notably, Reuters reports that Venezuela has been pumping more than 500,000 bpd less than its target. So, let’s clear up the math. OPEC and its non-OPEC partners are effectively saying they are going to be ramping up production by 2 million bpd, 1 million to make up for lost compliance and 1 million in additional capacity. How are the markets reacting? The Brent-WTI spread is getting slammed. 

The United States has surpassed Russia and Saudi Arabia for the first time ever in holding the world’s most oil reserves.  Rystad Energy conducted a three year study of 60,000 oilfields and measured existing fields and recoverable reserves.  The recoverable reserves are barrels that are technologically and economically feasible to extract.  The energy industry measures both discoverable and yet undiscoverable areas to measure the long-term health of an oil producing nation’s economy.