OPEC to slash output by 1.2mn bpd; Iran exempted


Saudi Arabia said Thursday it is unsure if a deal will be reached with fellow OPEC members on oil output cuts.

The oil-producer club will curb output from January by 800,000 barrels per day (bpd) versus October levels, while non-OPEC allies will contribute an additional 400,000 bpd of cuts, in a move to be reviewed at a meeting in April.

"The impression that the group can't really come to a decision without first checking with Moscow is going to be hard for some members to swallow", said Derek Brower, a director at consultant RS Energy Group.

Iran, Libya, and Venezuela have all been made exempt from the cuts. “And because OPEC does not want to grant anyone exemptions and because the three countries in question simply would not sign off without one, OPEC will not be releasing country level breakdowns.”.

Oil, which suffered a great deal in November, started rallying at the start of the month on hopes of fresh output cut in the OPEC meeting held in Vienna on Dec 6.

The high-stakes meeting, coming just as the U.S. Congress is ratcheting up pressure on Riyadh over its role in the murder of a Washington Post columnist and in the war in Yemen, is also Saudi Arabia's latest effort to come to grips with a double-barreled new reality.

The price of crude jumped almost 4.5 percent Friday morning, to $53.75 per barrel, on word of the agreement, which called for a bigger reduction than analysts had expected. It was up 3.7% for the week.

He told reporters that the kingdom is "not confident" an agreement on oil output cuts can be reached. Prices extended declines on Friday.

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Saudi Arabia and others had agreed back in June to pump more oil, partly to make up for lost Iranian supplies and prevent prices spiking to $100 a barrel.

"I know for a fact that oil and gas producers in the United States are probably breathing a sigh of relief that we are providing some certainty and visibility for 2019", he said. “That, combined with a gloomy outlook on global growth, pushed the oil prices down.

The plans come as the industry is grappling with a roughly 30% slide in prices since October.

In order to put an end to crude oil prices, the organization of oil producing countries has agreed to cut the oil production.

But OPEC is trying to stabilize oil markets after U.S. crude prices plunged 22% in November, marking the the worst month since the global financial crisis in 2008.

America turned into a net oil exporter last week, breaking nearly 75 years of continued dependence on foreign oil and marking a pivotal - even if likely brief - moment toward what U.S. President Donald Trump has branded as "energy independence".

The weekly report from the US Commodity Futures Trading Commission on WTI wagers will be delayed until Monday, following a day of mourning earlier this week for former President George H.W. Bush. The end result may be a muddled middle course that neither stabilizes the price of oil nor mollifies a USA leader obsessed with keeping gasoline cheap.

Economic Affairs Minister Datuk Seri Azmin Ali said Malaysia's reduced output was in line with its commitment to worldwide cooperation to face economic challenges posed by the global oil market. The Wall Street Journal survey had shown expectations for supply increases of 1.8 million barrels in gasoline and 1.3 million barrels in distillate inventories.