After two days of intense negotiations in Vienna, the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Malaysia, finally broke the deadlock and reached a larger-than-expected production reduction agreement.
(New York, Vienna, 8) After two days of intense negotiations in Vienna, the Organization of the Petroleum Exporting Countries (OPEC) and allies, including Malaysia, finally broke the deadlock and reached an agreement to reduce production at scale higher than expected. .
OPEC and its allies have agreed to reduce the market supply scale by 1.2 million barrels per day, and OPEC has 800,000 barrels of oil. Iran has become the winner of the talks, saying it was exempt from production cuts because of US sanctions.
Oil prices rose 5.4%
After the news was released, the international oil price rose 5.4 percent, making the deal more likely to infuriate US President Trump, urging OPEC not to cut production to cut oil prices.
Finishing yesterday, Brent crude futures rose $ 1.61 or 2.7 percent to $ 61.67 a barrel. At the beginning of the session, the contract had fallen below $ 60 a barrel, and it seemed likely that oil-producing countries would maintain their production targets. Subsequently, after news of the agreement on production cutbacks, Brent crude futures reached an intraday record of $ 63.73 and then retreated later in the session.
New York crude futures rose $ 1.12 or 2.2 percent to $ 52.61 a barrel, hitting a daily high of $ 54.22.
New York crude oil prices rose 3% this week, and Brent crude oil prices rose 4.8%. Since October, owing to the increase in oil supply, global demand growth has weakened and oil prices have fallen by 30%.
Before the OPEC Secretariat made that breakthrough, as a vital mediation force between Saudi Arabia and Iran, non-members of OPEC, Russia, called a series of bilateral meetings. The power to reshape the global landscape of oil has brought mounting pressure on OPEC, making it an unprecedented reliance on Russian support and fierce opposition from Trump.
The final agreement to cut output 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 October's output as the basis for production cuts and re-evaluate the agreement in April next year.
The scale of Russia's 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 per day, but later suggested that it could agree to be a little larger than that.
Sin Chew Daily / Finance 182018.12.08