Global oil has rebalanced a bit

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Via Citi:

 Oil skeptics appear to be right and wrong in believing the OPEC/non-OPEC accord struck in late May will unravel due to a coming US production surge and a lack of compliance. It’s not just the increased output from the US, where rig counts have more than doubled over the last 12 months, but increased flows from unconventional oil sands and deep water as well. Combined the unconventionals alone could sate oil demand by 2019.

 Yet skeptics seem wrong in underestimating the durability between Riyadh and Moscow on oil market management. It’s been more than 10 months since Russian President Vladimir Putin and Saudi Deputy Crown Prince Mohammed bin Salman agreed to work bilaterally to stabilize oil markets. That agreement was motivated partly by the common financial pain the world’s two largest oil exporters were suffering, partly by the sense that working together they had a fair chance to raise near-term prices and partly by overlapping but divergent interests in oil markets and the Middle East.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.