PEC Reaches An Oil Deal. But Do Not Get Happy Just Yet...#MirMak

PEC Reaches An Oil Deal. But Do Not Get Happy Just Yet...#MirMak

OPEC reaches a deal to cut production by 4.5% or approximately 1.2 million barrels a day. Oil is rebounding. People are rejoicing but only the one's who are naive enough to have missed reading the history of OPEC and its members.
OPEC members are notorious cheaters. 3 times in the past 20 years they have reached a production cut and all 3 times they cheated with each other by pumping and dumping oil in the open market in Rotterdam through back channels. Secondly do not forget that an oil price increase helps the shale producers who were almost out of the game for months due to low prices. Prices will settle between $54 to $58 dollars maximum in 2017 but the moment they reach that level Iran, Nigeria and Libya who have been made exempt from production freeze will not only enjoy the ride but will increase their productions because they have a lower present quota. Russia, the biggest Non-OPEC producer does not take prisoners and all they will have to do is to increase a few hundred thousand barrels a day in production, plus the shale producers back in the game above $50 a barrel, OPEC members cheating with each other, and the chaos will start all over again within months in 2017.

So hold your horses and do not get overly optimistic and sell your house to buy oil stocks. Oil matters are more slippery (no pun intended) these days with Saudis losing their grip on OPEC, Iran back in the game, Iraq and Nigeria with internal problems, Russia the biggest Non-OPEC player suffering from low revenues, China consumption not increasing, mild winters in the offing.....there are too many reasons for me to believe that this rally is very temporary.