Oil prices rise as OPEC agrees on output cuts

The oil price across the global registered a surge as Organization of the Petroleum Exporting Countries (OPEC) on Wednesday agreed to cut 1.2 million barrels a day from its output to 32.5 million barrels, effective January.

By: Express Web Desk | Updated: November 30, 2016 10:16 pm
OPEC, Iran, Iran oil, Khaled al-Falih, Iran, Iran oil, OPEC oil cartel, Iran oil minister, iran oil, Petroleum Exporting Countries, World newsJabbar al-Luaibi, Iran oil minister, saudi arabia, The OPEC oil cartel held tense talks to try to agree its first output cut in eight years, sending oil prices soaring on hopes it will defy gloomy expectations.

The oil prices across the global registered a surge of more than eight per cent as Organization of the Petroleum Exporting Countries (OPEC) on Wednesday agreed to cut 1.2 million barrels a day from its output to 32.5 million barrels, effective January. This was the first such cut by the organisation in last eight years. The decision was taken after tense talks by the OPEC oil cartel.

The cuts include Iraq reducing output by 200,000 bpd to 4.351 million bpd beginning in January. Kuwait, Venezuela and Algeria have agreed to monitor compliance with the OPEC agreement.

Non-OPEC member Russia has agreed to cut output by 300,000 bpd. OPEC will meet with non-OPEC producers on Dec. 9. U.S. West Texas Intermediate crude futures <CLc1 rose $4.02 to $49.25 a barrel, a 8.9 percent gain, by 11:24 a.m. (1624 GMT). WTI briefly traded at a high of $49.37 a barrel, a 9 percent gain.

Brent crude futures rose $3.79 to $50.17 a barrel, a 8.2 percent gain.

As OPEC ministers began their meeting, Khaled al-Falih, energy minister of the cartel’s biggest producer Saudi Arabia, sounded an upbeat note. “We don’t know (if a deal will be reached),” he said. “We will find out during the meeting. I think the sentiment generally is optimistic and positive.”

Before the meeting, Iraq’s Oil Minister Jabbar al-Luaibi said he was “very optimistic we’re going to come with very fruitful results…There will be a cut, yes, definitely,” Bloomberg News reported.

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First Published on: November 30, 2016 10:09 pm
  1. A
    Abhishek
    Nov 30, 2016 at 7:26 pm
    Now RSS will begin to feel the heat. Real problems begin with rise in OPEC prices
    Reply
    1. V
      Vasi krish
      Nov 30, 2016 at 6:21 pm
      smart , artificially they are trying push the price to go high .. can we do this to our products and services ?
      Reply
      1. S
        Surendran Kr
        Nov 30, 2016 at 6:46 pm
        This is the time India should put in place a comprehensive energy policy. Domestic explorers should be paid on the basis of production cost plus a predetermined profit. The price of their production should not be linked to Brent as is the practice. Penger car potion in major cities and towns should be capped if we are to have control of the import of oil.
        Reply
        1. B
          Bharat Maa
          Nov 30, 2016 at 9:17 pm
          Fekubaba tussi great ho
          Reply
          1. V
            Vihari Naidu
            Nov 30, 2016 at 6:13 pm
            With demonetization and consequent fall in rupee value has impacted petroleum and natural gas imports. Now this decision will further exacerbate the problem.....
            Reply
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