Higher gasoline prices ahead — BUSINESS REPORT

“However, most would prefer other members to cut rather than themselves”. They had been been forced to cancel talks aimed at getting other suppliers like Russian Federation and Brazil to play a part. But Russia will use its November-December output levels, Energy Minister Alexander Novak told reporters on Thursday.

“It looks achievable on the face of it, provided the parties to the latest production cut deal stick to their pledges, which has historically been somewhat of a sticking point”, ANZ bank said on Friday.

Al-Falih would make good on his word.

MIDF Research said, ceteris paribus, the total cut from both Opec and non-Opec members to be about 1.8 million bpd, which will lead to an oil deficit of around 1 million to 1.5 million bpd. President-elect Donald Trump has vowed to increase drilling in the us, the world’s third-largest producer after Saudi Arabia and Russian Federation, which would help ensure there is plenty of oil. Oil prices then surged more than 15 percent to above $50 a barrel, with Brent reaching its highest level in more than a year.

Rising output from Libya and Nigeria could erode OPEC’s output cut to nearly nothing by next yearThe deal itself was a masterclass in compromise and peer pressure.

The first OPEC agreement in eight years could be the driver that the market has been waiting for to break out of its stubborn trading range of $40-$50. Russia’s offer to trim production by as much as 300,000 barrels a day is suspiciously close to earlier comments that a freeze would leave it 200,000-300,000 barrels below its planned daily output in 2017.

OPEC’s price war was a misguided attempt to drive its competitors, mainly United States firms, out of business by flooding the world with oil.

A new round of petro-diplomacy ensued. OPEC plans to hold talks with non-OPEC producers next week in Doha.

The deal now only applies for six months, after which there is no guarantee OPEC members will reach a consensus to extend it. They all seemed reluctant to cut.

The last two years have been painful for OPEC: The group will earn $341 billion from oil exports this year, according to the U.S. Energy Information Administration. Market was volatile as tiffs among Saudi Arabia, Iran and Iraq intensified. According to Bloomberg News, the deal is created to drain record global oil inventories. The country was eager to make up lost revenue after global economic sanctions were lifted in the wake of a landmark nuclear deal. But, it appears that OPEC’s last-minute diplomatic push has been successful.

The ministerial meeting followed and lasted more than five hours. AAA said Wednesday that retail prices nationwide likely will increase 5 to 10 cents a gallon following the OPEC deal. By cutting excess costs and rolling out new technology, these frackers are much more competitive than just a few years ago. Non-member Russian Federation agreed to curtail output by as much as 300,000 barrels a day. The futures markets were showing a ideal inversion between commercials and speculators at around -270k and +270k, respectively. A harsh solution was chosen: for a second time, Indonesia’s membership was to be suspended.

Notes Sue Trinh, senior currency strategist at RBC Capital Markets: “Historically, Opec’s track record of enforcing production cuts has been poor”.