Oil prices surged this week as OPEC surpassed expectations by confirming production cuts and announcing quotas for member countries. Given OPEC’s poor record on compliance, we are sceptical that the deal will result in materially lower supply in 2017. That said, the group has achieved its aim of bolstering prices, at least for now. Meanwhile, the US employment report on Friday held few surprises and does not change our view that the Fed will hike rates at this month’s FOMC meeting.
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