Opec To Decrease Oil Output By 1.2m Barrels A Day

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The U.S. Energy Department's Energy Information Agency (EIA) identifies the non-OPEC oil-producing countries to include Russian Federation, the United States, China, Mexico, Canada, Norway and Brazil.

After the conclusion of 175th meeting of the OPEC Conference in Vienna, Saudi Energy Minister Khalid al-Falih told reporters that the kingdom is "not confident" an agreement on oil output cuts can be reached.

The Organisation of Petroleum Exporting Countries (OPEC) and other major oil producers yesterday agreed to cut about 1.2 million barrels of oil to address falling oil price, which is now facing a record low of $63 a barrel. According to weekly data from the EIA, U.S. crude oil production kept at a record 11.7 million bpd throughout November, although these numbers are likely to come off a bit in the monthly estimates. Russia, and other producers outside the cartel, promised to slash an additional 400,000 barrels per day.

With a higher production-cut level, both would have substantiated statements that they are not reacting to President Trump's tweets, and they have a clear and rational approach for the market.

OPEC delegates have said the group and its allies could cut by 1 million bpd if Russian Federation contributed 150,000 bpd of that reduction. OPEC members include Algeria, Angola, Congo, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and Venezuela.

The surge is mainly due to soaring USA oil production, which has jumped by 2.5 million bpd since early 2016 to a record 11.7 million bpd, making the United States the world's biggest producer. As for OPEC itself, the group was walking a tightrope between cutting sufficiently to stabilize the price, and not too much as to unleash a Twitter storm by US President Donald Trump.

The Trump administration has supported that transition by opening new public land to drilling and loosening restrictions on public and private oil and gas production, with "energy independence" as a frequent talking point. World oil prices are down by about 31% since early October.

With pressure from Trump, Riyadh could propose OPEC+ lower production by 1 mbpd not to aggravate the US president. "Global demand for oil is growing fast, and the economy is growing".

The cuts are due to start in January and last six months.

"The U.S., by virtue of the fact that we consume oil, is subject to global price fluctuations, supply disruptions, and the geopolitics related to oil supply and oil-producing countries".

The government on Friday expressed confidence that whatever decision the Organisation of Petroleum Exporting Countries (OPEC) takes on output cuts to check the fall in crude prices, it would not go against the interests of consuming nations.

USA light crude rose US$2.69 to a high of US$54.18 a barrel before slipping to around US$53.80.

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