OPEC Uncertainty Weighs on Oil Prices

“We do expect some form of agreement, but oil market reaction will hinge on the credibility of the proposed action”, said USA investment bank Jefferies on Friday, adding that recent output increases to record levels in many countries now required a deep cut for it to significantly lift oil prices.

In the provisional agreement, Opec members agreed to cut production to between 32.5m and 33m barrels per day (bpd).

Iraq is willing to cut its crude oil output as part of OPEC’s plan to reduce global supply and boost crude prices, Prime Minister Haider al-Abadi told reporters on Wednesday in Baghdad. The bank also picked Surge Energy Inc. and Cardinal Energy Ltd.as domestic companies that could benefit.

Venezuela depends on oil for about 95 percent of export revenues, so the price fall has contributed to a severe recession along with failing socialist economic policies.

Brent crude fell 1.5 percent to $48.24 a barrel amid speculation that OPEC may fail to reach a deal next week.

That would imply a supply cut of more than 1.2 million barrels per day, according to Reuters calculations.

The Organisation of Petroleum Exporting Countries (OPEC) is on course to finalise the details of the Algiers accord to cut oil production at a meeting in Vienna on said a delegate from Nigeria.

West Texas Intermediate for January delivery rose as much as 74 cents to $48.98 a barrel on the New York Mercantile Exchange and was at $48.78 as of 9:30 a.m. London time.

Renewed optimism that OPEC can reach an agreement during the November 30 meeting has led to an oil rally over the last week, but a deal is far from certain.

It is necessary to wait for the results of the talks, which are now underway within the Organization of the Petroleum Exporting Countries (OPEC), the energy minister noted. President Vladimir Putin has also repeatedly said he would prefer to freeze output at current record levels rather than make cuts.

Brent crude futures were up 12 cents at US$49.07 (RM217.99) a barrel at 1501 GMT. With Russia already doing what it can to maintain its 11 million b/d production in 2017, markets are right to be concerned about the sustainability of any agreement reached at the end of the month.

“The odds of OPEC getting a deal done continue to rise but the risks remain palpable”, analysts at Citigroup wrote in a note to clients. According to a statement from Iraq’s foreign minister, they believe that OPEC should let the country increase their production without any reservations.