In a move that suprised almost no-one, OPEC announced that cuts in production to help prop up oil prices may soon be on the horizon.
What was surprising was that US oil producers, who are not affiliated with the group, concurrently cut back production estimates. The change in US estimates is mostly technical; instead of relying on state research and computer models, the new accounting estimates based on what actual drillers in a few key states are predicting based on the conditions on the ground.
Both cuts come at a time when oil is near its 6-year low point, oil producing countries around the world have been feeling the bite with constantly-low prices. Many oil producing countries in the Middle East are members of OPEC, an organization that works to maintain stable prices for producers. In North America, Canada and the United States are both major oil producers, with the Canadian economy being especially hard-hit by low prices and the global supply glut. In Europe, Norway is one of the biggest producers, with government officials calling the recent price crash “worse than the financial crisis” for the Norwegian economy.
Russia is the world’s leading energy exporter, and the collapse in prices has been devistating to their economy, just as sanctions from Europe over Crimea and Ukraine began over a year ago.
Read More on Bloomberg