2016 OPEC Meet in Vienna Wednesday Nov 30,2016 - Agreement to cut output reached

 

Oil shot up over 10 % after producer club OPEC and Russia cut a deal to reduce output to drain a global supply glut, but analysts warned prices could recede as other producers stand ready to fill the gap.

The Organization of the Petroleum Exporting Countries (OPEC) had agreed on Wednesday Nov 30,2016 its first oil output reduction since2008 after de-facto leader Saudi Arabia accepted “a big hit” and dropped a demand that arch-rival Iran also slash output. 

The deal also included the group’s first coordinated action with non-OPEC member Russia in 15 years.

“OPEC has agreed to an historic production cut,” analysts atAB Bernstein said.

“The cut of 1.2 million barrels per day (bpd) was at the upper end of expectations (0.7-1.2 million bpd). An additional cut of 0.6 million bpd from non-OPEC countries could significantly add to what has been announced by OPEC.”

Following the announcements, the price for Brent crude futures, the international benchmark for oil prices, shot up over 10 per cent from below $50 on Wednesday to $51.92 per barrel at 0256 GMT.