Crude Oil Prices Could Tumble on Record OPEC and Russian Output

January West Texas Intermediate crude added 62 cents, or 1.2%, to settle at $US51.68 a barrel in NY. Slightly more (43 percent) see prices closer to $50, while 35 percent see them closer to $60.

Meanwhile, global benchmark Brent crude oil for February 2017 delivery was also gaining by approximately 1%, trading at around $55, marking a new 16-month high.

“And I think that’s a good thing because.it makes it more hard for OPEC to actually reach an agreement and. for that agreement to actually enter into force, because they can’t control the oil market like they used to be able to”.

So for the coming week, expect some second thoughts as investors look for more detail on the cuts and just who will cut.

Members of the Organization of the Petroleum Exporting Countries will this weekend meet with non-OPEC producers in Vienna to finalize a global deal to limit oil production. As part of the deal, Iran has agreed to cap its production at 3.797 million barrels per day while Saudi Arabia will cut its production by nearly 500,000 barrels per day.

On the customer side, Asian refiners are pretty certain their January supplies will not be affected by last week’s OPEC decision to reduce the cartel’s supply by around 1.2 million bpd from current levels to 32.5 million bpd, effective in January. Analysts point out that was the highest pre-sanctions production figure for the country.

Mr Stockdale noted Opec members were not due to begin cutting production until January, and even then all the parties had to keep their side of the bargain.

Supply from Opec increased to 34.19 million barrels per day (bpd) in November from 33.82 million bpd in October, according to the survey based on shipping data and information from industry sources. If (the OPEC countries) make a concentrated effort to reduce there will be a balance.

In this meeting, Indonesia was temporarily suspended from OPEC as it was unable to be included in the cuts. Although he has not yet assumed office, as his tenure begins in January 2017, the scenario may worsen for the Oil Producing and Exporting Countries as the U.S. now contributes to a bigger chunk of the global oil supply.

Russian Federation has agreed to cut back half the proposed non-Opec reduction targets.