Opec To Decrease Oil Output By 1.2m Barrels A Day

OPEC non-OPEC countries reach deal to cut crude output in 2019

OPEC non-OPEC countries reach deal to cut crude output in 2019

OPEC announced Friday that it will reduce overall production among its members by 800,000 barrels a day from October's levels for six months, beginning in January.

Iraq, OPEC's second-largest producer, pledged to cut 140,000 bpd.

Speaking to reporters at the end of the session, Iran's Petroleum Minister Bijan Zangeneh expressed his satisfaction with the decision.

Opec and allies including Russian Federation, which together account for half of the world's oil production, have committed to reducing output by around 1.2mb/d a day. They even tapped into their strategic resources to show Trump their full support for his plans. But that could force it to lose credibility within the cartel, its allies and global oil market, according to experts. In Trump's world everybody was happy until warning alarms started to wail.

“Iran, Venezuela and Libya are exempt from the deal, but due to the usual politics within the group, these will not be called exemptions, ” he said.

"U.S. political pressure is clearly a dominant factor at this OPEC meeting, limiting the scope of Saudi actions to rebalance the market", said Gary Ross, chief executive of Black Gold Investors and a veteran OPEC watcher.

Oil producers have been under pressure to reduce production following a sharp fall in oil prices over the past couple of months.

But prices bounced up almost 3% on Friday to $62.92 a barrel after the oil cartel and its partners reached a deal. Devin Geoghegan follows oil markets for Genscape.

NOGUCHI: Meanwhile, smaller oil-producing countries need the money and grouse about their waning influence.

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Mohamed Azmin said this decision is a testament of Malaysia's commitment to worldwide cooperation in facing economic challenges posed by the global oil market.

As much as Trump's decision calmed the market it shocked the Kingdom to the core.

A 1.2 million-bpd cut, if implemented fully, "should be enough to largely attenuate, but not eliminate, expected implied global inventory builds in the first half of next year", Harry Tchilinguirian, global oil strategist at BNP Paribas in London told the Reuters Global Oil Forum.

As oversupply rises with the USA, however, Russian Federation and Saudi Arabia pumping oil at record levels, crude prices slumped more than 30 percent in the last two months.

The situation grew tenser resulting in a slight war of words between the two sides.

Suhail Mohamed al-Mazrouei, who is also the United Arab Emirates' energy minister, said at the conclusion of a two-day meeting in Vienna, that the reduction is a "major step forward".

The December OPEC meeting is set to be critical in this regard, as producers discuss further output cuts in 2019.

Aside from its importance for oil market, the G20 summit was going to be a test for the Saudi crown prince since it was his first appearance on the global stage since the Khashoggi incident.

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