Looks like the oil price rout will take a breather for a while. After an output cut deal signed on November 30, non-OPEC members too decided over the weekend to join to the output cut move in order to tighten supplies and put an end to a two-and-half year long oil price upheaval.
This has given a boost to both WTI and Brent futures by about 5% and poised oil-related investments for gains in the coming sessions.
As per Bloomberg, the OPEC and non-OPEC pact will likely control over 60% of the world’s oil output. However, the move does not include major producers like the U.S., China, Canada, Norway and Brazil.
Already crude oil price was headed toward $55-level at the time of writing. In fact, as per Bernstein, “assuming reasonable compliance levels, these cuts will be enough to push the market into deficit” and lead to $60/bbl Brent crude price in the near term.
If this $50–$55 becomes a reality and stays for long, it will definitely put some country stocks and ETFs in focus. These are the key oil producing and exporting countries with revenues earned from oil accounting for a major share of their GDP. These country ETFs bled when oil slid but could be on high gear if oil prices stage a sustained recovery.