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A view shows Saudi Aramco's Manifa oilfield, Saudi Arabia.   © Reuters
Looking ahead 2018

OPEC, against the odds, reboots global oil markets for 2018

'Exit strategy' from output cuts will bring a new challenge in the new year

| Middle East

What a difference a year makes. In the oil markets, it has produced a $10 a barrel rise in benchmark Brent crude, a well-engineered cutback of more than 1 million barrels a day in global oil supply and an estimated decline of 83 million barrels in OECD oil inventories in the first three quarters of 2017. Oil stocks had increased by 38 million barrels in the same period of 2016, adding to the world's glut for the third year in a row and pressuring prices down.

OPEC has risen from the ashes and vindicated the oil bulls. U.S. crude production has returned to growth territory after the first annual drop in eight years in 2016. However, much to OPEC's relief, U.S. output has perked up, not rocketed. The country's shale drillers, waiting for higher crude prices to pounce on more oil rigs a year ago, have adopted a new mantra: profits over production.

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