Oil nations promising to cap production
Saudi Arabia, Russia and some other oil producers agreed to freeze production at January levels.
The thing is, they're producing at maxed-out levels with no plans to increase.
It's like putting the gas pedal to the floor and then promising not to go any faster. The only major OPEC producer who isn't joining the agreement is Iran, who is planning to ramp up production over the next two years.
The oil market hasn't been fooled and WTI is lower after rallying in anticipation of some kind of significant action.
But I wouldn't cast it aside entirely. Right now it's only amounted to jawboning and rhetoric but it's proof that Russia will work with OPEC. Iraq is joining as well. They produced a record 4.35 million barrels in January but are expected to add production. Bloomberg quoted unnamed officials who said they are prepared to join a pact to cap production at current levels.
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