Oil drops as markets question long-term ramifications of the OPEC deal
|Oil prices at both sides of the Atlantic dropped almost 1% as investors question the long-term ramifications of the OPEC deal.
Brent oil was last seen trading 0.90% lower on the day around $53.97/barrel. WTI oil was down 1% at $51.20/barrel.
Prices rallied last week after the OPEC agreed to cut the output for the first time since 2008. Moreover, the non-OPEC heavyweights like Russia agreed to chip-in as well.
However, the question faced by investors is whether the deal would help rebalance the oil markets in the long-run. Shale producers are seen increasing oil output in response to higher prices, which eventually could end up forcing OPEC members to override the output cut deal.
The Baker Hughes data released on Friday showed drillers added three oil rigs in the week to Dec. 2, bringing the total count up to 477, the most since January, but still below the 545 rigs seen a year ago.
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