ANALYSIS: TRUE. OPEC’s Cuts Are Treading Water.

The agreed cut of about 1.2 million barrels a day, if translated barrel-for-barrel into exports, means we ought to see the volume of oil in transit fall the same amount. So, in the first 70 days of this year, we ought to have seen it fall by about 84 million barrels — all other things being equal.

Data from U.K. research firm Oil Movements certainly shows the volume of oil in transit falling since the start of the year — a clear indication that cuts are happening. The amount is much less than OPEC would like. The volume of oil in tankers fell around 9 million barrels from Dec. 31 to March 11, which equates to 123,000 barrels a day. The forecast is for volumes to drop another 7 million barrels by April 1. But it’s still not enough to keep OPEC happy.One problem is that rising U.S. production has partly offset the reduction in flows from the OPEC countries in the Middle East.

The simplified version is that U.S. oil production is reaching a point where OPEC can choose to sell 100 barrels at $50, or 125 barrels at $40. They can choose between higher profit margins or larger market share, but the days of having both are over for now.