For the first time since 2008, sources in the Organization of the Petroleum Exporting Countries said the group would reduce output to 32.5 million barrels per day from current production of 33.24 million bpd, Reuters reports.
“OPEC made an exceptional decision today. ... After two and a half years, OPEC reached consensus to manage the market,” Iranian Oil Minister Bijan Zanganeh was quoted by Iran’s SHANA news agency as saying.
The production cuts per country will be determined at the next OPEC meeting in Vienna on November 30, according to sources.
Oil prices jumped more than 5 percent to trade above $48 per barrel on Wednesday evening.
“This is the first OPEC deal in eight years! The cartel proved that it still matters even in the age of shale! This is the end of the ‘production war’ and OPEC claims victory,” said Phil Flynn, senior energy analyst at Price Futures Group.
Jeff Quigley, director of energy markets at Houston-based Stratas Advisors, said the market had yet to discover who would produce what: “I want to hear from the mouth of the Iranian oil minister that he’s not going to go back to pre-sanctions levels. For the Saudis, it just goes against the conventional wisdom of what they’ve been saying.”
This is a developing story, please check back for details.
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