Recently, the Organization of the Petroleum Exporting Countries (OPEC) and its partners decided to extend their nine-month agreement to reduce their oil production until the end of March 2018.
This renewed reduction represents 1.8 million barrels a day, or nearly 2% of the world’s oil production.
Patrick Pouyanné, the CEO of the Total group said that “it was a good decision”, as the period goes beyond six months. According to him, this OPEC decision gives visibility to the market, at least until 2018.
These measures have allowed the price of crude oil to reach the $ 50 mark. Producing countries that depend heavily on oil revenues will thus be able to benefit from a certain amount of budgetary room for maneuver.
This is the case, for example, of Saudi Arabia which, despite the economic situation, had to resort to its foreign exchange reserves to bail out its budget deficit.
According to Patrick Pouyanné, the group expects oil stocks to decline in the second half of this year. If this is the case, the market would react accordingly. Total and its partners will be able to see their stocks move.