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By Michael Poulson, A/S Global Risk Management

Bears or bulls - plenty of news for everyone. The number of active U.S. oil rigs increased heavily, but the compliance committee is highly optimistic on the production cut by OPEC and non-OPEC oil producers.

Friday's weekly oil rig count pointed to a whopping 29 new active oil rigs in the U.S. - the total number is now 551, the highest in nearly one-and-a-half years. The previous reading showed a decline of 7 rigs. U.S. crude oil production has increased 6% since mid-2016 and is now around end-2014 level. Question now is how much the increasing prices will spur additional production.

Over the weekend, OPEC and non-OPEC members of the monitoring committee (monitoring the compliance of the production cut deal from November) met and commented that the producers have already cut production by 1.5 mio. barrels per day. Russia's oil minister mentioned that "the deal is a success" and that output reduction could reach 1.7 mio. barrels per day by the end of January. The target of the deal is a 1.8 mio. bpd production cut by both OPEC (1.2 mio.) and non-OPEC (0.5 mio.) oil producers. According to Saudi Arabia's oil minister, the country produces less than 10 mio. bpd. and that next month will see even lower levels. Next meeting in the control committee takes place in March.

Today is thin on economic data, but the week will among other deliver EU PMI data tomorrow, U.S. GDP on Friday and a row of central bank speeches. End of the week marks the beginning of the Chinese Lunar Year.

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A/S Global Risk Management is a provider of customised hedging solutions for the management of price risk on fuel expenses. The company has offices in Denmark and Singapore. For further details about its risk management products and services, please call +45 88 38 00 00 or email hedging@global-riskmanagement.com.