The International Monetary Fund will take into account the impact of OPEC member-states’ agreements with non-OPEC countries on oil production cut in its World Economic Outlook Update, which will be published next week, First Deputy Managing Director David Lipton told TASS.
“We had already in our last projections in the fall [2016 – TASS] taken into account the OPEC decision but the non-OPEC countries agreement came later. We’ll be putting out a new World Economic Outlook Update next week that will take this into account. We tend to use the futures market prices for oil as our projected prices, and that’s the way we’ll base that forecast,” he said.
In November OPEC decided to limit production to 32.5 mln barrels per day in the first half of 2017, down 1.2 mln barrels per day from October 2016 production levels, with the possibility of extending this limit for the remainder of the year. In a subsequent meeting on December 10, eleven non-OPEC countries pledged to cut production, among them Azerbaijan, Bahrein, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, the Republic of Sudan and South Sudan.
Thus, the total crude oil production cut will amount to 1.7-1.8 mln barrels per day.
“It’s very hard to know how OPEC and non-OPEC oil producers will behave and whether agreements like the one that’s been reached will have sustained effect. It’s very hard to tell. The Russian economy is going to be affected by oil market developments for sure, and it’s possible that positive shock of higher prices or negative shock of lower prices will happen, and I think that Russian economic policy has to be ready for both outcomes,” Lipton said.