Following the OPEC deal, the oil prices had some recovery. However, the investors are worried about how far the OPEC deal will be respected. As a consequence, the oil prices have taken a backtrack. In the last week, the members of the Organization of Petroleum Exporting Countries (OPEC) discussed the imminent need to control oil production to cope up with the lowering of oil prices. In the meeting, it was agreed that the participating members will reduce their production to avoid over-supply in the market. This gave a breath of relief to the lowering oil prices.
On Wednesday however, sweet and light crude decreased 0.4% and Brent crude also faced a loss of 0.2%. The analysts and investors are skeptical about the extent to which the cartel members follow the production quotas. The oil producing countries are notorious for breaking their own deal. Even though the OPEC members have agreed on production cuts, the way it will be deployed is still a mystery.
Furthermore, the non-members of OPEC also play a major role in regulating oil supply globally. Russia was also persuaded to control output, but no clear declaration is made yet. A meeting between the non-members and OPEC is scheduled on Saturday. In November, the reports have shed light on higher production by OPEC and this has further resulted in lowering of oil prices. There is still hope that the oil prices will stabilize in the next year when the OPEC and non-OPEC members cut down their production internationally.