OPEC nations, Russia agree to cut oil output to lift prices

OPEC nations, Russia agree to cut oil output to lift prices

The sticking point in the talks, which dragged on over two days, appears to have been how to share the cuts among the 14 Opec countries and nations like Russian Federation that have been coordinating their production with the cartel in recent years.

A meeting of the OPEC group of major oil-exporting countries broke up late Thursday without agreement on cutting production to head off pressure on prices from abundant reserves and slowing global economic growth.

Under the new deal, the size of the OPEC+ daily production cuts target will be increased from 1.2 million barrels to 1.7 million barrels, compared to a baseline of October 2018, according to ministers including Russia's Alexander Novak and Iran's Bijan Namdar Zanganeh.

Saudi Arabia surprised the oil market by promising significant additional production cuts beyond what was agreed with fellow OPEC members.

The price of crude has been held down in recent years by a resurgence in supplies from countries outside OPEC, particularly the United States.

He added that after improved compliance from other members, the actual cut will be effectively 2.1 million bpd.

The fundamentals for oil suggests an imbalance in the market through 2020.

Attending his first OPEC meeting as Saudi oil minister, Prince Abdulaziz bin Salman gave no indication of where he stood on the proposal for more cuts.

Oil prices surged following the announcement, with USA benchmark WTI and its European counterpart Brent both almost 2% higher shortly after 1500 GMT.

On Thursday, the state oil giant priced its IPO at the top of its price range, raising $25.6 billion and topping Alibaba's record $25 billion listing in 2014.

Oil is still set for a weekly gain because of shrinking American crude stockpiles and signs of progress on a possible U.S.

It's unclear whether energy prices will continue to rise, however.

That deal was originally fixed in December past year and extended at OPEC's last meeting in July.

Saudi Arabia has been bearing the burden of the largest share of production cuts recently. "However, deeper compliance is imperative and hence the deal will last only for one quarter so that they can assess compliance then", said Amrita Sen, co-founder of Energy Aspects. Russia, which has complied with its production quota for just three months of this year, had its proposal to exclude a very light oil called condensate approved on Thursday, potentially giving it space to keep pumping above its target.

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