OPEC agrees to cut output to push up oil price

Prices were also hit as non-OPEC Russia confirmed it would not send a delegation to the Organisation of the Petroleum Exporting Countries’ meeting in Vienna on Wednesday.

A breakthrough would come after months of on-and-off-again negotiations that made many traders doubt an agreement could be reached.

OPEC kingpin Saudi Arabia added to the pessimism about prospects for a deal on Sunday by appearing to say it could live without an agreement. In addition, cartel members are notorious for cheating after agreeing to cuts. U.S. January West Texas Intermediate (WTI) crude was at $45.46, up $0.23 or +0.51%.

Brent crude rose as much as 7.8 per cent to US$50.03 a barrel in London.

If this trend continues, OPEC’s ability to control global oil supply and control prices will be greatly diminished.

There are still unanswered questions about the agreement.

There remains disagreement among OPEC members over which producers should cut and by how much. OPEC will meet with non-OPEC producers on December 9. “Today’s unity is a very explicit sign about the position of OPEC”.

Saudi Arabia has reported that it is willing to accept an increase in production from Iran to around 3.9 million barrels a day, as other, smaller countries agree to a total decrease. Since then, Russian Federation has said it would merely freeze its output and only if OPEC came to an agreement first.

Analysts at Goldman Sachs, Barclays, and ANZ said oil prices would quickly fall to the low $40s a barrel if OPEC fails to strike a deal to cut output.

OPEC said it would exempt Iran, Libya and Nigeria from cuts as their output has been crimped by sanctions and unrest. He has a deep understanding of market fundamentals and the impact of global events on capital markets.

Oil stocks climbed after OPEC nations agreed to cut production for the first time in eight years.

But OPEC isn’t the only game in town.

In October, Russia pumped 11.2 million bpd, the highest volume since the collapse of the Soviet Union.

He added that while non-OPEC oil producers had increased their supply by 1.5 million barrels a day in 2015, the consortium now expects non-members’ oil supply to shrink by 800,000 barrels a day in 2016 – and to grow even less in 2017, at a rate of 200,000 barrels a day.

US producers would likely also be quick to strike if prices were to increase, bringing more supplies online. Earlier this year, Trump made threats to halt oil imports from Saudi Arabia and other Arab countries if they didn’t commit to fighting ISIS or reimburse the USA for their efforts.

Last night following his meeting with Iranian Energy Minister Bijan Namdar Zanganeh at Kempinski Hotel in Vienna, Algerian counterpart Noureddine Boutarfa said he held a good meeting with Iranian minister, stressing his optimism for the outcome of Wednesday’s OPEC meeting.