Back to Opec. Assessing the deal agreed yesterday, Michael Hsueh, of Deutsche Bank, said:

"The agreement is certainly helpful for balances although no more so than we have already assumed in our modeling. In order to properly assess the impact of the agreement, we first refer to IEA reported production figures in October 2016 as our baseline, and assume that all agreed cuts are made from this starting point except for Angola for whom the baseline is September 2016 owing to maintenance in October.

"The result of the cuts applied to October 2016 production levels shows that production would only fall to 32.75 mmb/d according to IEA figures, and to 32.62 mmb/d according to OPEC figures released with the press statement. After taking into account possible production increases from exempt countries, we calculate that 2017 production in a scenario of perfect compliance could easily total 32.9 mmb/d for OPEC-14 countries. Furthermore if we are to incorporate Libya's claims that it may raise production to 800 kb/d in the relatively near term, this adds 290 kb/d to the possible level of production bringing it to 33.2 mmb/d.

"Therefore our pre-existing expectation of OPEC-14 production at 33.2 mmb/d in 2017 (32.46 mmb/d excluding Indonesia which has now left the organisation) remains a viable assumption. We can think of the difference between the 32.9 mmb/d figure and 33.2 mmb/d assumption as representing some combination of upside risk to Libya and some small degree of noncompliance."