WTI Crude staged a savage rebound during trading on Wednesday with prices clipping $49 following the shocking OPEC production cut deal which eased some concerns over the excessive oversupply in the markets. This market defying cut will be the first in 8 years, a critical move which has ensured OPEC maintains some credibility. Production will be trimmed by roughly 1.2 million barrels per day which sets the new ceiling at 32.5 million. It appears that in the most critical of moments, Saudi Arabia, Iran and Iraq have solved their difference consequently propelling oil prices further.
While the deal is undeniably impressive, there are still some questions that need to be answered at the press conference. Reports of Indonesia being suspended from the cartel could probe the effectiveness of the production cut, as Indonesia continues to produce 750,000 barrels per day but this will not be included in the OPEC figures. In the short term, the good feel effect could encourage WTI bulls to send crude prices towards $50.