Oil prices rise on planned OPEC-led production cut

But OPEC’s 14 members have been at odds over the plan, which aims to cut output by up to 750,000 million mb/d to between 32.5 and 33 mb/d.

Trump has called last year’s deal ending a diplomatic standoff between Iran and six world powers over the country’s nuclear policy and opening the way for western investment “the worst deal ever negotiated”, although he has also conceded it would be hard to tear up a deal enshrined in a United Nations resolution.

“Once the dust settles and a deal has been reached, the market may want to see whether the cartel is able, for the first time in years, to comply with its own stated production targets”.

Dominick Chirichella from the New York-based Energy Management Institute believes that there is still only a 50% chance that OPEC will make any meaningful cuts to output.

Tariq Zahir, an analyst at Tyche Capital Advisors, echoed the sentiments of his doubtful colleagues by stating, “There’s going to be some cut, but is Saudi Arabia really going to take the lion’s share of the cut?”

Beyond OPEC, traders said the strong US -dollar, which this month has hit levels last seen in 2003 against a basket of other leading currencies (), was influencing oil prices. “Iran and Iraq are now revisiting their demands for exemptions, seeking to pressure Saudi Arabia to do all the work”. “If we keep production at the current level we are making our contribution, for us that essentially means a cut of 200,000-300,000 barrels per day”, he told journalists at the Fifth International Energy Efficiency and Energy Development Forum held in Moscow. The Prime Minister said that the country should shoulder responsibility for some of the planned reductions. Algeria said last week Iran was not a problem. It was unclear whether the countries would accept these terms, which are yet to be presented to their oil ministers. Prices may initially rise on the news of an agreement, but the rally is likely to be limited because USA shale oil drillers are likely to massively increase their own output.

Russia’s offer to freeze production at record levels – if Opec does a deal – isn’t good enough for some members who are asking for a cut.

The January contract for global crude benchmark Brent was up 1.53% at $49.67 a barrel while its USA counterpart West Texas Intermediate was up 1.31% at $48.37 a barrel. The official OPEC meeting, and deadline for the production cut agreement, is November 30.

With two of the top three oil producers in OPEC wanting out of the deal, it appeared a final agreement was doomed.

But analysts have doubts whether, and to what extent, an output cut will be agreed upon.

OPEC has spent the nearly two months since the Algiers meeting trying to work out how to share out supply curbs.

“There is certainty that everybody is on board”, Nigerian OPEC delegate Ibrahim Waya was quoted by Bloomberg News as saying on Tuesday morning in Vienna. “Everyone knows that the stakes are high”.