Russian Oil Output Near Post-Soviet Record as It Prepares to Cut

The commodity jumped more than 10%, marking the largest one-day gain since August 2012, and smashed trading volume records.

“A weaker USA dollar is typically supportive for commodity prices and may have helped steady crude oil from the lows in today’s trade”.

The Energy Department predicts that US production will fall from 9.4 million barrels a day in 2015 to 8.8 million this year and 8.7 million next year – the forecast assumed oil at $50 a barrel next year.

OPEC recently reached their first major agreement in over a decade, when they agreed to cut production in order to support the market price of oil. By veering toward the lower end of the 32.5-33.0 million bpd target range proposed under the September 28 resolution in Algeria, OPEC not only silenced its critics with a hastily cobbled-together consensus and a “meaningful” cut, but also seized the moral authority to seek a commensurate reduction from Russian Federation and some of the other major producers outside the group. He hopes to restore output to about 2.2 million barrels a day.

OPEC produces a third of global oil, or around 33.6 million bpd, and the deal it would reduce output by 1.2 million bpd from January 2017.

It turns out that OPEC members have managed to agree on oil production cuts for the first time since 2008.

“Volatility is set to be high in the oil market in the days ahead”, analysts at Barclays said. Higher oil prices would cause pump prices in the U.S.to rise because crude oil accounts for almost half the cost of a gallon of gasoline, though any effects from oil price fluctuations usually take a week or longer to trickle down to consumers. Saudi Arabia and Iran both gave ground, showing again that OPEC can function even when members are fighting each other elsewhere.

Iran was granted limited concession to allow settle down and recover, after serving years of U.S. -imposed sanctions, including restrictions on its oil production and exports.

Mexico’s Secretariat of Energy on December 1 said the country would reduce its output by 215,000 bpd effective January 1 to 1.944 million bpd.

Iran’s oil production decreased dramatically during 2012-2015 due to sanctions and the country says it has right to resume the output to the pre-sanctions level.

“The losers are Europe and Japan – oil-importing regions of the world”, Guatieri said. The data showed that US crude stockpiles unexpectedly fell by 884,000 million barrels in the week (ending November 25) compared to analysts’ expectation of an increase of 636,000 barrels. In November of this year, the state average declined a total of 10 cents at the pump for most Floridians.

Traders said the extent of the impact of the output deal will also depend on how it affects exports from Saudi Arabia and other OPEC members.

On Friday at 1 p.m. ET (1800 GMT), energy services firm Baker Hughes Inc, is expected to report another increase in oil drilling rig counts, extending the rise into a seventh month.

Gross long positions in NYMEX crude oil futures and options fell by 16,337 contracts to 335,219 lots. The expense ratio comes in at 0.95%.

Sure, the fact that a deal is sealed is a positive development. WTI oil is nearly $49/b.

It would also help if you had some insights into how to try and successfully trade crude oil stocks and potentially make a profit from oil futures. The average loss was 1.38 percent. UWTI surged 25.1% on the day.