The OPEC Agreement Puts A Floor Under Oil Prices

The OPEC Agreement Puts A Floor Under Oil Prices

Given the production restraints in some countries, the one million barrels per day proposal would in reality end up adding several hundred thousand barrels to the market. Even after the group's decision had been announced, Trump was still tweeting hopefully about OPEC increasing production.

By avoiding setting individual country targets, the deal appears to give Saudi Arabia the leeway to produce more than its official OPEC target and fill the gap left by those like Venezuela who can not pump enough to meet their official allocation.

Al Jazeera's Paul Brennan explains why.

The 24 nations in the supply-cut pact, known as Opec+, agreed in late 2016 to trim production by 1.8 million barrels a day but they have actually been keeping some 2.8 million barrels per day off the market.

The announcement was made on Saturday during the 4th OPEC and non-OPEC ministerial meeting in Vienna.

Two OPEC sources said the group agreed that OPEC and its allies led by Russian Federation should increase production by about 1 million barrels per day (bpd), or 1 percent of global supply.

The actual output increases set a bullish tone, as they came in below some of the highest figures that had been discussed prior to the meeting. Russia, a non-member, is the second largest oil producer after Saudi. The minister said the difference between that amounts to "a little bit less than 1 million barrels".

Verizon to stop sharing phone-location data to third parties
Verizon is the first USA wireless carrier to announce plans to break ties with these data brokers. This wasn't happening in the case of Securus, which obtained the data from LocationSmart.

State oil company Saudi Aramco had anticipated this week's decision and was already ramping up output, Al-Falih said. He was repeatedly asked whether countries with spare production capacity - mainly Saudi Arabia - would be able to make up the volumes that others can't produce.

Crude oil prices are rising sharply, extending weekly gains.

The contentious meeting took place under the shadow of vituperation from U.S. President Donald Trump, who anxious that high oil and gasoline prices would be politically painful ahead of midterm elections later this year.

OPEC and its allies have since previous year been participating in a pact to cut output by 1.8 million bpd.

"I agreed to have 100 percent of compliance, not more", Iran's Zanganeh said as he left OPEC headquarters on Friday. The measure has helped rebalance the market in the past 18 months and lifted oil to around $74 per barrel from as low as $27 in 2016.

Support for the increase, which had been proposed by Saudi Arabia against objections from Iran, was unanimous, he said. This not only adversely impacts one of OPEC's largest member's upstream activities, further weighing output levels lower by 600,000 bpd, but also lead to the retraction of production volumes half amounting to nearly half of OPEC's agreed total reduction of 1.2 mbpd. Crude oil price in India surged from $50.57 bbl in May previous year to $75.31 bbl this May.

Related News:



Most liked

England training notes 'no advantage' for Panama
Three Lions defender Kyle Walker shared the same view as his manager on the leaked team news. Southgate said: "This morning he followed the exact programme we had planned".

Messi is no Ronaldo, France legend slams Argentina captain
As for the comparisons to Ronaldo, Shaka Hislop, reporting for The Undefeated, believes it's much bigger than that. In two World Cup games, the only constant has been the fact that Argentina can not get out of its own way.

Shmackem: Who ya got? NBA Draft special
Joel Embiid appeared to be offended by comparisons to Deandre Ayton , the No. 1 pick in Thursday night's NBA Draft . Meanwhile, the 6-foot-7 Bridges was a third-team All-American and a member of Villanova's 2018 Final Four team.

New Supreme Court Decision Adds Urgency to Tax Fight
Quill stated that USA states could only change sales taxes on companies with a physical presence in the state. In making the 5-4 decision, the court acknowledged but largely tossed out the internet companies' arguments.

High oil prices hurting fiscal balance, says Pradhan
Iran had balked at the request because it faces sanctions after President Donald Trump ripped up an global nuclear agreement. The US West Texas Intermediate (WTI) crude priced US$66.49 per barrel, up 1.5 per cent from the last close, said the source.

Priyanka Chopra and Nick Jonas's Photos Speak Louder than Words
After months of speculation, it seems Priyanka Chopra and Nick Jonas have finally decided to make their relationship official. And in a new interview with People , Chopra discussed her future hopes, including whether or not she wanted to have kids.

Administration finalizes rule expanding access to association health plans
The company showed signs of improvement in the first quarter of this year, earning a $2.8 million underwriting profit in NY . For insurance to be affordable, you need most of the policyholders to be paying premiums and not using very many services.

Kansas star Malik Newman agrees to two-way contract with Lakers
Upon transfer to Lawrence, he sat out one year before emerging as one of the best offensive weapons for Bill Self's team. Newman will join Kansas teammate Svi Mykhailiuk with the Lakers, selected 47th overall in Thursday's draft.

‘Jurassic World: Fallen Kingdom’ Roars to $15.3 Million on Thursday
What did Chris Pratt , Bryce Dallas Howard , Jeff Goldblum, Justice Smith , Daniella Pineda , and director J.A. Isla Nublar now sits abandoned by humans while the surviving dinosaurs fend for themselves in the jungles.

Neymar pulls up injured in Brazil training
Supporters were in for a surprise on Friday as Brazil and Costa Rica walked out for their World Cup Group E clash in St. Costa Rica and LAFC forward Marco Ureña told reporters this week that his side can spring an upset.

Nigeria vs Iceland - Preview, Live Match | 22 Jun 2018
If Nigeria wins, they'll jump right past Iceland and Argentina into second place. 2' - Free-kick for Iceland early in the game. Iceland are one of the best around at setting up not to be beaten - but they'll need to go out and win this match.

US military to have a separate 'Space Force'
We provide our community with the opportunity to share their opinions and vote on topics that matter most to them. Trump does not yet have congressional support, and the process will require this along with an established plan.

Supreme Court decision could lead to increased Oklahoma revenues
Kaufman said he anticipates that the Supreme Court ruling "will eliminate any question about whether we're able to collect it". Representatives of the state argued that the rule needed to be reconsidered in the age of online shopping.

England face tough test against Panama, says Harold Cummings
And both did enough to mark themselves down as potential starters as England hopefully drill further down into this World Cup . For the first time in a while, the youngsters will feel expectation weighing down on them.

Online storm over Melania Trump's 'I don't care' jacket
Her husband, President Barack Obama, was the talk of a 24-hour news cycle when he donned a tan suit in 2014 for a media briefing. Many have praised Trump for seeming to diverge from Donald Trump's attitude on separating children from their families.