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The global oil market is a volatile place. But, abstracting from high-frequency fluctuations, average annual world prices (in U.S. dollars) plummeted about 60 percent between 2012 and 2016 . In the majority of cases, the twin surpluses of 2011, prior to the peak in oil prices, gave way to substantial twin deficits in 2016 .The rise took the Rig Count to its highest level since September 2015, as U.S. production has replaced cutbacks by OPEC and other producers, and U.S. inventories have set new record highs each of the last five weeks.Judging from their actions, the governments of several oil-producing countries appear to be betting that the slide in oil prices is either over or about to end soon. If oil prices fail to recover, however, this surge in debt issuance could backfire. While the future of oil prices is uncertain, the fate of countries that have treated adverse shocks as temporary and reversible, and were then proven wrong, has seldom been encouraging.
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