OPEC countries agreed to extend a policy to cut around 1.8 million barrels per day (bpd) until the end of March 2018, extending a deal that would have expired in June this year. That will be welcome news to consumers and energy-hungry businesses worldwide but could continue to strain the budgets of some of the more economically-troubled oil-producing nations, like Venezuela and Brazil.
Global benchmark Brent inched about 0.1% higher to $51.50, after slumping 4.6% overnight.
Well then - it looks as though OPEC, Russia and other major oil producers have agreed this week that they are going to hold their collective brush power for another nine months. However, the oil price fell almost 4 per cent after last week's meeting to $51.30 for a barrel of Brent crude, the worldwide benchmark.
The cuts are likely to be shared again by a dozen non-members led by top oil producer Russian Federation, which reduced output in tandem with OPEC from January.
It's believed that this will be more than sufficient to bring the oil market back into balance, by which they mean bring oil stocks back down to their five year average.
Three years ago, USA shale producers needed to see prices of $70 to $80 per barrel to be competitive, he said.
Brent crude fell $2.60 to $51.36 a barrel on Thursday and was trading at $51.47 on Friday morning while the West Texas Intermediate slipped $2.58 to $48.78 a barrel and had reached $48.82 on Friday. "All in all, the decision to reduce crude output should logically increase modify global prices".
"The outcome of the OPEC meeting which was scheduled on 25th May 2017 made a decision to cut 1.8 million barrels per day through March 2018".
Analysts criticised Opec's failure to make deeper cuts to production. Many OPEC members spoke after the meeting of a stabilization of prices in the near-term, however given the current supply and demand fundamentals with the oil market, I don't expect a rebound to 2013 levels anytime soon.
Baku, Fineko/abc.az. World prices of oil reacted quite suddenly to a 9-month extension (OPEC+) of the Vienna transaction OPEC/NOPEC on freezing of oil production.
Rather than restrain output, USA producers are expected to increase output by more than 1 million barrels of oil per day next year.
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