Opec countries agree first oil output cut in eight years

[AmirPatriot]

Opec countries have agreed their first supply cut in eight years, sending the price of crude surging more than 8%.

Mohammed Bin Saleh Al-Sada, Opec's president, said a cut of 1.2 million barrels a day would start from January.

That is about 3% of the group's output and would bring total production to 32.5 million barrels per day.

The price of Brent crude jumped 8.4% to $51.3 a barrel, and US crude rose 8.2% to $48.9%. The price has plunged in the last two years from more than $100.

According Mr Al-Sada, key non-Opec countries were party to the deal and were tentatively planning to reduce their output.

He did not list those involved, but said Russia was prepared to cut 300,000 barrels from its output of more than 10 million barrels a day.

Seeking consensus
The deal comes after oil ministers agreed to a cut in principle in September, which would have limited output by about 700,000 barrels a day while allowing Iran to increase production.

But reported disagreements between Saudi Arabia - the world's biggest oil producer - and Iran led to doubts an agreement would be secured.

The Saudis had been hesitant to shoulder the lion's share of a cut, while Iran had resisted reducing its own production, arguing it had yet to recover its output levels after years of sanctions.

At Wednesday's meeting, however, Saudi Arabia agreed to cut output by about 500,000 barrels per day - a total reduction of about 4.5%.

That would take its output to 10.06 million barrels per day.

The Reuters news agency also reported earlier that Opec had agreed to suspend Indonesia's Opec membership, to allow Iran to set new production levels at 3.797 million barrels per day.

Ahead of Wednesday's meeting, the Saudi energy minister, Khalid al-Falih, said there were "good chances" that a deal would be brokered.

However, he said Saudi Arabia would have to "take a big cut and a big hit" to current production - and its 2017 forecast - if Opec production were limited to 32.5 million barrels per day.

"So we will not do it unless we make sure that there is consensus," he added.

He also said a production freeze in Iran at pre-sanctions levels would be "very considerate of other Opec members when they're having to cut".

"Iran has recovered to its pre-sanctions levels," Mr Al-Falih said.

http://www.bbc.co.uk/news/business-38155185

 

[C130]

if this is true and they really commit to this cut for the duration, expect tight oil to start coming back online big time.

 

[Dawood Ibrahim]

if this is true and they really commit to this cut for the duration, expect tight oil to start coming back online big time.

I think the gaps will be fill by US oil companies let's see

 

[C130]

I think the gaps will be fill by US oil companies let's see

the wells are already drilled...they just need to be fracked. it'll take 3 to 6 months to get that oil to market.
https://www.bloomberg.com/news/arti...s-as-drillers-keep-oil-out-of-market-i8u004xl

I would expect a 500,000 barrel increase by May from the U.S

 

[Dawood Ibrahim]

the wells are already drilled...they just need to be fracked. it'll take 3 to 6 months to get that oil to market.
https://www.bloomberg.com/news/arti...s-as-drillers-keep-oil-out-of-market-i8u004xl

I would expect a 500,000 barrel increase by May from the U.S

Exactly this will dragged the market Down or flat and opec members might regret this decision and when they also want to join sell more than it will go real down

 

[C130]

Exactly this will dragged the market Down or flat and opec members might regret this decision and when they also want to join sell more than it will go real down

let's say OPEC does the cut of 1.2mmbd starting January 1st and I believe want this to last for 6 months

that' s taking 216 million off the market. little more than what U.S imports in two months.

problem is China is done or almost done with filling up it's SPR about 1mmbpd
U.S tight oil comes back online in 3 to 6 months
Canada continues to increase production
Libya continue to increase production
Nigeria continues to increase production
Iran continues to increase production

OPEC is finished. they would need to decease a lot more than 1.2 mmbpd for 6 months more like 3 mmbpd for 1 year just to knock off all the extra crude that has been building for the last three years, and U.S Canada,Iran,Iraq, will still continue to increase production.

I just don't see how oil will over get back $100!! which is needed for OPEC and the GCC to grow and keep it's people happy.

 

[Dawood Ibrahim]

let's say OPEC does the cut of 1.2mmbd by January 1st and they want to do this cut I think for 6 months

that' s taking 216 million off the market. little more than what U.S imports in two months.

problem is China is done or almost done with filling up it's SPR about 1mmbpd
U.S tight oil comes back online in 3 to 6 months
Canada continues increase production
Libya continue to increase production
Nigeria continues to increase production
Iran continues to increase production

OPEC is finished. they would need to decease a lot more than 1.2 mmbpd for 6 months more like 3 mmbpd for 1 year just to knock off all the extra crude that has been building for the last three years, and U.S Canada,Iran,Iraq, will still continue to increase production.

I just don't see how oil will over get back $100!! which is needed for OPEC and the GCC to grow and keep it's people happy.

Agreed no body wants to loose their market share coz others are waiting to take it pluse if we predicate the future its gona be electric cars means less fuel

 

[C130]

Agreed no body wants to loose their market share coz others are waiting to take it pluse if we predicate the future its gona be electric cars means less fuel

electric cars are still another 15 to 20 years away before they really start taking market share from oil, but it's just more proof oil/OPEC days are numbered.

 

[Dawood Ibrahim]

electric cars are still another 15 to 20 years away before they really start taking market share from oil, but it's just more proof oil/OPEC days are numbered.

but in Pakistan increased yalla buddy have to go ALLAH HAFIZ

 

[C130]

but in Pakistan increased yalla buddy have to go ALLAH HAFIZ

yeah it's increasing all over. this year 1 out of 100 cars sold in U.S was electric, and I would expect in 10/15 years that will be more like 20 out of every 100 cars sold will be electric.

 

[HAIDER]

electric cars are still another 15 to 20 years away before they really start taking market share from oil, but it's just more proof oil/OPEC days are numbered.

Its not away ,it oil cartel monopoly. Millions of people will lose job is another issue.

 

[C130]

Its not away ,it oil cartel monopoly. Millions of people will lose job is another issue.

OPEC/GCC should have started investing in going green back in 2005/8, but no instead they were to busy building 1KM tall buildings and buying Ferrari's

.

 

[jha]

Interesting decision ..... Ramification may be bad for OPEC itself.

 

[HAIDER]

OPEC/GCC should have started investing in going green back in 2005/8, but no instead they were to busy building 1KM tall buildings and buying Ferrari's

.

Do you think they will promote green energy , they promote on Green mulla...

 

[C130]

Do you think they will promote green energy , they promote on Green mulla...

they will have no choice. i am just saying they could have used a good chunk of that oil wealth to invest in the next new form of energy production -renewable's- what will they do now when renewable's reach parity with oil?? oil will still be valuable since it has dozens of applications.