Wednesday, September 28, 2016

OPEC Reaches Deal On Cutting Oil Output

Participants attend the end session of the 15th International Energy Forum Ministerial (IEF15) in Algiers, Algeria September 28, 2016. REUTERS/Ramzi Boudina

Reuters: OPEC reaches first deal to cut oil output since 2008 - sources

OPEC agreed on Wednesday to cut its oil output for the first time since 2008, with the group's leader Saudi Arabia softening its stance on arch-rival Iran amid mounting pressure from low oil prices.

Two 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.

How much each country will produce is to be decided at the next formal meeting of OPEC in November, when an invitation to join cuts could also be extended to non-OPEC countries such as Russia, sources said.

Oil prices LCOc1 jumped more than 5 percent to trade above $48 per barrel as of 1830 GMT after the outcome of OPEC's informal meeting in Algeria took traders by surprise. Still, many said they wanted to see the details of the deal.

Read more ....

WNU Editor: So much for Saudi Arabia's policy of grabbing market share .... they have thrown in the towel. Russia is not part of this deal .... which tells me that the bump in prices that OPEC was hoping for may not happen (at least for now).

More News On OPEC Reaching A Deal To Cut Oil Output

OPEC Agrees on Need to Cut Oil Output -- WSJ
OPEC agrees to limit oil output at 32.5 million barrels per day -- Reuters
OPEC Agrees to First Oil Output Cut in Eight Years -- Bloomberg
Oil Climbs Most in Five Months as OPEC Said to Reach Output Deal -- Bloomberg


RRH said...

How should the Russians view this?

James said...

Until they reach an agreement on production for each individual country and enforce it, this is all talk.

C-Low said...

In other news US oil shale spins up to fill the void in market share.

It was a game of chicken and the Saudis realized they were going to collapse before US shale.

Now the final test will be the election if its Clinton the EPA will finish or at least stifle what US shale if it is Trump you will see the Shale, Gulf, Alaska and maybe even more. The only reason oil was the price it was is because we the US was stupid enough to stop all production while a handful of foreign nations that are at best quasi or mutual allies on certain terms basis become the only game in town literally holding US over a barrel.

Shale broke through the EPA/Fed door only because it was a new tech not planned on and the land was private owned. If you added the Gulf, Alaska, maybe even FL offshore, plus the shale in other regions Penn, NY etc... then off course the Federal Lands the US will be able to keep fuel prices to our desire regardless OPEC.

Cheep oil is good for the west and China who build things bad for all the tin horn dictators that run their oil economy fiefdoms while oppressing their citizens.

B.Poster said...


You are quite correct. To borrow a poker term if the US "plays it's cards right" it could well become the go to country for oil. This would give us incredible leverage on dealing with adversaries and potential adversaries. Before shale oil we would have had little choice.

Under President Trump their is at least the possibility we might be able to exploit this. Under Clinton there is no possibility of taking advantage of this.