2016 has been a historic year for Oil with all the OPEC / non-OPEC meetings, inclusion and exclusion of some member and non-member countries and eventual promises. The highlight was when 10 OPEC members agreed on Nov. 30 to cut their combined output by around 1.2 million barrels a day. There were some exclusions that are to date not part of the clout including the United States.
2017 will be the year of implementation to agreements made. Here's how the cuts in Oil production stands to date. First month has been very much in-line with the plan which gives optimism that the plan is likely to be implemented in further months to come.
The U.S. though and some other nations continue to add to already high volumes of the commodity produced (extracted and refined), for reasons of control over the commodity price and market share.
Here's how the historic price of US Oil and UK Oil has played out (time horizon is different on charts for data availability from the source).
Although not at all-time lows, Oil prices have dropped significantly from the highs a decade ago. With progressive technology and major additions to nations that produce their own oil, global supply has increased far more than the global demand. In addition to this, use of alternative form of energy like for example the renewable energy, natural gas and even the upcoming hi-tech electric vehicles implementation plans, are leading drop in Oil prices.
With cuts implemented, at-least a part of problem of glut will get resolved. Any positive step is better than no step. Prices are seen consolidating between $50 - $60 per barrel range. Will Oil price manage to reach back to its all time highs? This might not happen immediately, so in next few months of 2017 or even until the year end. Good news for the consumers, but not so good for the producers and even the Big Oil companies involved in Oil production processes globally. Truly said not everyone can be kept happy at the same time. How exactly this historic influential source of energy will play out in the near-term, mid-term and long-term, is something only time and futuristic technology will shape.