OPEC, Russia and other oil producing countries have agreed\nto further cuts in production in an attempt to support crude oil prices in the\nface of an abundance of supply looming, mainly due to the booming US\nproduction.<\/p>\n\n\n\n
Following a meeting in Vienna, OPEC said on Friday that the\nproducing group would cut supplies by an additional 500,000 bpd, bringing the\ntotal cuts to 1.7 million bpd.<\/p>\n\n\n\n
The Kingdom of Saudi Arabia and its allies, led by the\nKingdom of Saudi Arabia, have been restricting their production since 2017.\nTheir current agreement aims to remove 1.2 million barrels per day from global\nmarkets and is due to expire in March 2020.<\/p>\n\n\n\n
The OPEC statement did not mention extending the cuts until\nJune or even December 2020, as some analysts expected. However, oil markets\nwere supported by news of additional cuts and pushed US crude oil prices up\n0.8% to $ 59 a barrel.<\/p>\n\n\n\n
OPEC said, “This additional adjustment would be\neffective as of 1 January 2020 and is subject to full conformity by every\ncountry,\u201d<\/p>\n\n\n\n
Reuters reported that OPEC countries will bear 340,000\nbarrels per day of new cuts, while other producers take the remaining 160,000\nbarrels per day.<\/p>\n\n\n\n
The restrictions imposed by OPEC and Russia have largely\nsucceeded in supporting prices, although they are still well below the level of\n$70 a barrel reached in October 2018. The problem is that non-OPEC countries,\nled by the United States, continue to increase production.<\/p>\n\n\n\n
Oil production from non-OPEC countries is expected to\nincrease by a record 2.3 million barrels per day in 2020, according to the\nconsultancy Rystad Energy. This would easily exceed the previous record of 1.96\nmillion in 1978.<\/p>\n\n\n\n
Saudi Arabia, the largest producer in OPEC so far, is doing\na lot of heavy lifting to limit supply. It produces less than OPEC’s share in\nmost of this year.<\/p>\n\n\n\n
The current oil price is especially important for Riyadh\nbecause Saudi Arabia is about to list shares in the government oil monopoly, Saudi\nAramco, for the first time.<\/p>\n\n\n\n
Saudi Aramco said on Thursday it had sold 3 billion shares\nat 32 riyals ($8.53) per share in its initial public offering. The public\noffering raised $25.6 billion, surpassing the initial public offering of\nChina\u2019s Alibaba in 2014, becoming the largest in history.<\/p>\n","protected":false},"excerpt":{"rendered":"
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