From the same New York Times article. "But analysts have...

From the same New York Times article.

"But analysts have expressed skepticism that either Russia or Saudi Arabia are even capable of producing more than they are today so that the freeze was at record levels that will not reduce the glut. Russian production is already beginning to decline, because of a lack of sufficient investment to replace output lost from aging fields.
“If Russia wants to freeze production at January levels it needs to increase production,” Fatih Birol, executive director of the Paris-based International Energy Agency, told reporters on Monday."

So even without interference in the market production will fall as the natural decline rates start kicking in on all fields and in particular with shale. It's no secret that they need to drill thousands of wells per year to keep their production rate constant in the US. That huge decline in the rig count will have to manifest itself as a 50 to 60% decline (in 12 months time) in all the tight wells that are now producing and are sub economic, which must be a very large proportion of all existing wells. There will be some latency due to wells that have been drilled and unstimulated in the US but the longer they go unstimulated the bigger the chance that many of these wells will become abandoned. We seem to be heading for a big fall in oil production within a year irrespective of what happens in the middle east. There are many reports that the US are the swing producer and will just hit some magical switch if the price of oil rises and turn on more wells. I simply don't believe that. The money that came flooding into tight oil and gas in the US came as part of a debt cycle. Just as the consumers in the US started to deleverage after all the housing foreclosures after the GFC so will the oil debt markets. Once bitten twice shy.

We will need a little patience but one things for sure. The situation in June when OPEC meets will look very different to now and if the oil price hasn't improved by then, Putin will use his big stick to get his way from the countries in the gulf. Eshmun