Kazakhstan says may announce cut after OPEC and non-OPEC meeting

Under this week’s follow-up agreement, the first between OPEC and Russian Federation since 2001, specific cuts for individual states were set, with nearly all OPEC members agreeing to cut from October levels.

Novak also said Azerbaijan, Kazakhstan, Mexico, Oman, Bahrain and other non-OPEC producers could join the deal.

There’s the worry over the member’s compliance with the agreed quota, and whether the deal will actually be adhered to.

“Brent was trading at about US$50 a barrel after the announcement, and we expect it to trade at an average of US$55-$60 per barrel in 2017”. Before we get to our new oil price target, here’s why the November OPEC meeting was so crucial for oil prices… “Saudi Arabia tried unsuccessfully to break US shale oil production through excess supply.” said Lafferty. Its session high was US$51.80 a barrel, US13 cents below its 2016 high. When many thought that OPEC had no more influence on oil prices, yesterday proved them wrong with Brent prices surging by 9% to trade above $50.

Analysts said soaring oil prices in the next three to five years would be unlikely considering the current demand and supply situation in the oil market.

From January the 1st next year, producers will reduce their output by 1.2 million barrels a day to 32.5 million barrels.

Oil prices have dropped drastically since the second half of 2014. The other question is whether non-OPEC producers will stick to their side of the deal.

For the economy as a whole, the U.S. Labor Department said first-time claims for unemployment for the week ending November 26 increased 17,000 and the less volatile four-week moving average gained 500 from the previous estimate.

But front-month Brent crude futures LCOc1 were down 16 cents, or 0.3 percent, from their last settlement at $53.78 per barrel at 0836 GMT on Friday, as doubts emerged over the viability of the announced cut.

According to the International Energy Agency, Iran’s oil output is likely to reach 6 mb/d.

Despite the continual rise of oil prices and China’s status as a major oil importer, Lin said the effect on the Chinese economy will be “limited”. “I consider the issues related to reduction of production by non-OPEC countries will be talked at the meeting”.

The OPEC deal triggered frenzied trading, with Brent futures trading volumes for February and March, when the supply cut will start to be visible in the market, hitting record volumes.