After two days of intensive talks in Vienna, the Organization of Petroleum Exporting Countries (OPEC) and the Allies, including Malaysia, finally broke the deadlock and achieved a larger-than-expected agreement to cut production.
After two days of intense negotiations in Vienna, the Organization of Petroleum Exporting Countries (OPEC) and the Allies, including Malaysia, finally broke off the deadlock and reached a broader agreement to cut production, than expected. ,
OPEC and its allies have agreed to reduce the size of supply to the market by 1.2 million barrels per day, while OPEC carries 800,000 barrels. Iran became the winner of the talks, saying it was released from layoffs due to US sanctions.
Oil prices skyrocketed by 5.4%
After the news was released, the international oil price jumped 5.4 percent, making the deal more likely to angered US President Trump, who urged OPEC not to cut production to cut oil prices.
Closing yesterday, Brent's crude futures rose $ 1.61 or 2.7% to close at $ 61.67 a barrel. At the beginning of the session, the contract fell below $ 60 a barrel and it appears that oil-producing countries will maintain their production targets. Subsequently, following the news of the cut-back agreement, Brent crude crude futures peaked at $ 63.73 in the day, after which they fell later on the session.
New York oil futures rose 1.12 dollars or 2.2% to 52.61 dollars a barrel, reaching a daily peak of 54.22 dollars.
Oil prices in New York grew by 3% for the week and Brent crude oil prices rose 4.8%. Since October, due to the increase in oil supplies, world demand growth has weakened and oil prices have fallen by 30%.
Before the OPEC Secretariat made this breakthrough, as a vital intermediary force between Saudi Arabia and Iran, the non-OPEC countries called for a series of bilateral meetings. The power to redefine the global oil landscape has led to mounting pressure on OPEC, which has made it unprecedentedly dependent on Russian support and fierce opposition from Trump.
The final cutback agreement was unexpected, as delegates said the previously discussed proposal was a daily reduction of about 1 million barrels and OPEC was responsible for 650,000 barrels.
Revaluation in April next year
Oil producing countries will use production in October as the basis for cuts in production and will review the deal next April.
The scale of Russian production cuts is still unknown. One representative said earlier that the initial reduction in production in the country was between 100,000 and 150,000 barrels a day, but later suggested he might agree to be a little higher than that.
Source of the article:
Sin Chew Daily / Finance ‧ / 2018.12.08