OPEC Deal Struck, Oil Up at Least 10%, KSA Take “Big Hit”

تم نشره في Wed 30 November / Nov 2016. 01:00 AM
  • A view of an oil refinery off the coast of Singapore. – (Reuters)

NEW YORK/VIENNA — OPEC agreed, Wednesday, on the first extra-organisational oil production cut deal since 2008; including Non-OPEC Russia, after Saudi Arabia accepted "a big output hit" and dropped its demand on arch-rival Iran to slash output, leading Brent prices up 8.6 per cent to USD50.36 per barrel, with February LCOc2 futures at USD52.09 per barrel, up 10 per cent.

US West Texas Intermediate crude CLc1 futures for January delivery rose USD4.34 to USD49.57 a barrel, by 9.6 per cent, following an earlier 10 per cent leap, the largest one-day move since February, 2016.

Oil prices will continue to strengthen on the deal, but sharp gains will be limited as market scepticism lingers about how effective the cuts will be.

Non-OPEC Russia, who joined the output reductions for the first time in 15 years to help the Organization of the Petroleum Exporting Countries prop up oil prices, along with Iran are effectively fighting two proxy wars against Saudi Arabia, in Yemen and Syria.

Saudi Arabia will take the lion's share of cuts by reducing output by almost 0.5 million bpd to 10.06 million bpd. Its Gulf OPEC allies - the United Arab Emirates, Kuwait and Qatar - would cut by a total 0.3 million bpd.

Iraq, which had insisted on higher output quotas to fund its fight against ISIS militants, unexpectedly agreed to reduce production - by 0.2 million bpd.