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OPEC's Path From Oil Freeze to Output Cuts Is Far From Clear

  • Production cap requires few sacrifices from major producers
  • Saudi Arabia is sending signals that its policy could change
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OPEC's Path to Output Cuts Unclear

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Saudi Arabia said its accord with Russia to cap oil production was “the beginning of a process,” but the path from a freeze to the output cuts needed to eliminate a global surplus is far from clear.

When Saudi Oil Minister Ali al-Naimi suggested that the agreement in Doha was a prelude to “other steps,” he fanned hopes that the kingdom’s resistance to production cuts was finally weakening. Oil’s recovery from a 12-year low last month was fueled by speculation that major producers were finally building a coalition that could work to end the glut.