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It's a good day for OPEC.
Data released by the oil cartel on Monday showed its members had largely complied with their agreement to reduce production.
The confirmation cap marks a surprising year for OPEC, which was forced to devise a plan to raise oil prices after the price fell to $26 a barrel in February 2016.
The plunge in prices to levels not seen since 2003 was caused by months of oversupply, slowing demand from China and Western countries' decision to lift nuclear sanctions on Iran.
Since then, the market has seen a surprising turnaround. The price of crude oil doubled to $53.50 per barrel.
Here's how major oil producers collaborated to boost prices.
OPEC deal
OPEC agreed to massive production cuts in November to ease the global oil glut and price stimulus.
When news of the deal broke, the price immediately rose 9%.
Investors cheered even more when several non-OPEC oil producing countries, including Russia, Mexico, and Kazakhstan, joined efforts to limit supply.
The deal was decidedly halted. An OPEC report released on Monday found member countries had largely met their commitments to cut production. The International Energy Agency agrees: OPEC compliance in January is estimated at 90%.
UAE Energy Minister Suhail Al Mazrouei told CNNMoney on Monday that the results were much better than expected.
This production reduction totals 1.8 million barrels per day and is scheduled to be reduced for six months.
Related: OPEC begins one of its 'biggest' production cuts.
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Investors are optimistic
The OPEC deal took months to negotiate, and investors really liked it. The number of hedge funds and other institutional investors betting on higher oil prices hit a record high in January, according to OPEC.
Widespread optimism helps fuel price increases.
increase in demand
Global oil demand was higher than expected in 2016, driven by strong economic growth, increased vehicle sales and colder-than-expected fourth quarter weather, according to the latest data from OPEC and the IEA.
Demand is expected to increase further to an average of 95.8 million barrels per day in 2017, compared to 94.6 million barrels per day in 2016.
The IEA said that if OPEC sticks to its agreement, the global oil supply glut that has plagued markets for the past three years will finally disappear in 2017.
Saudi oil minister: “I can’t sleep because of the shale issue”
What are your future plans?
Despite the impressive growth, analysts warn that prices may not rise significantly.
This is because rising oil prices are likely to bring U.S. shale producers back into the market. The total number of active oil rigs in the U.S. last week was 591, according to data from Baker Hughes. There were 152 more people than a year ago.
U.S. crude oil stockpiles in January were nearly 200 million barrels higher than the five-year average, according to an OPEC report.
“This significant increase in inventories is the result of a strong supply response from U.S. shale producers who have not participated in the OPEC agreement and have used the resulting price increases to increase production,” said analyst Fiona Cincotta. City index.
More supply could put pressure on OPEC once again.
CNN Money (London) First Posted: February 13, 2017: 9:13 AM ET