OPEC’s commitment to cuts and the resulting prices hike has only come off as a result of the commitment of Saudi and her peers. Only recently, Mr. Khalid al Falih, Saudi Oil Minister, has said that Saudi is not willing to let go off the approach until they reach a balanced market. The OPEC ended months of speculation last week after it decided to extend the cuts to its production which will run through the end of 2018.
Oil prices fell on Tuesday after a drop in US Crude inventories; International benchmark Brent crude futures were trading up 6 cents, or 0.1 percent, from their last close at $62.51 per barrel by 0410 GMT.
U.S. West Texas Intermediate (WTI) crude futures were up 12 cents, or 0.2 percent, at $57.59 per barrel.
Goldman Sachs research has said that Saudi Arabia and Russia have shown a strong commitment towards extending the cuts and raised Brent and WTI spot forecasts for 2018 to $62 and $57.50 per barrel respectively.
The only hurdle that remains in OPEC’s way is the rising production in US from Shale Reserves. The North American Shale production has boomed in the recent years as producers achieved break even at the Fracking technology that employs horizontal drilling to extract oil from sand deposits.