Published: Thu, December 13, 2018
Business | By Eloise Houston

OPEC Cut Was Not Easy

OPEC Cut Was Not Easy

In a monthly report, the Organization of the Petroleum Exporting Countries said 2019 demand for its crude would fall to 31.44 million barrels per day, 100,000 bpd less than predicted last month and 1.53 million less than it now produces.

West Texas Intermediate futures prices traded up to $52.11 a barrel at 4:34pm, after settling at $51.65 a barrel on the New York Mercantile Exchange, a 65 cent increase over Monday. This would hurt crude oil demand and contribute to views that the market is oversupplied, traders have said. China is moving toward cutting its trade-war tariffs on imported USA -made cars, a step already brandished by Trump as a concession won during trade talks in Argentina.

UAE Energy Minister Suhail Al Mazroui has said that Qatar's decision to withdraw from OPEC would not affect the continuation of production.

The cartel's allies, who include Russian Federation and nine other non-OPEC oil producing nations, will also contribute to the deal by trimming their output by 400,000 bpd over the same period.

There are also some doubts that all producers will follow through with their announced cuts.

Crude output has surged in the United States, set to end 2018 as the world's top oil producer, ahead of Russian Federation and Saudi Arabia.

The meeting took place after OPEC and non-OPEC oil exporting countries rejected pressure from U.S. President Donald Trump to further reduce oil prices by refraining from cutting production.

Russia, the world's second biggest crude producer, will curb its production by around 228,000 bpd, 2 percent of its 11.4 million bpd production level in October, Energy Minister Aleksandr Novak confirmed Friday.

International Brent crude oil futures had yet to trade.

Daily oil production stood at 801,000 barrels in November 2018, of which 733,000 barrels accounted for crude oil and 68,000 barrels for condensate, while 6,000 barrels of oil products were exported.

Some countries have been applied a compromise within the framework of the agreement on reduction of oil production.

The decision to cut back on supply next year comes amid an oil market plagued by oversupply which has seen the price of crude lose more than 30% of its value since October.

OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices.

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