• 5 minutes 'No - Deal Brexit' vs 'Operation Fear' Globalist Pushback ... Impact to World Economies and Oil
  • 8 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 12 minutes Will Uncle Sam Step Up and Cut Production
  • 2 mins A legitimate Request: France Wants Progress In Ukraine Before Russia Returns To G7
  • 7 hours Danish Royal Palace ‘Surprised’ By Trump Canceling Trip
  • 8 hours Recession Jitters Are Rising. Is There Reason To Worry?
  • 3 hours Used Thin Film Solar Panels at 15 Cents per Watt
  • 7 hours China has invested btw $30 - $40 Billon in Canadian Oil Sands. Trump should put 10% tariffs on all Chinese oil exported into or thru U.S. in which Chinese companies have invested .
  • 14 hours US Shale Economic Impact: GDP gain realized in shale boom’s first 10 years
  • 2 hours IS ANOTHER MIDDLE EAST WAR REQUIRED TO BOLSTER THE OIL PRICE
  • 14 hours Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
  • 21 hours Offshore subsea sub 50$/bbl : Rystad Energy: High stakes in store for subsea markets if oil falls to $50/bbl
  • 20 hours It's Not the Job of the Government to Dictate Where Businesses Should Go
  • 17 hours Philadelphia Energy Solutions seeks to permanently shut oil refinery - sources
  • 18 hours Tit For Tat: China Strikes Back In Trade Dispute With U.S. With New Tariffs
  • 13 hours Domino Effect: Rashida Tlaib Rejects Israel's Offer For 'Humanitarian' Visit To West Bank
  • 12 hours NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Oil Prices Spike As OPEC Reaches Deal On Production Cut

Defying all odds, OPEC provisionally reached the much-hyped agreement to cut output in a bid to boost oil prices. According to an OPEC delegate quoted by Bloomberg News, the ministerial meeting in Vienna has just reached a deal to cut output by 1.2 million barrels per day to 32.5 million barrels per day.

But there’s a catch. According to a ZeroHedge tweet, it looks like the OPEC deal would be conditional on a subsequent deal with non-OPEC producers in December to agree on a 600,000-bpd cut. If this is indeed the case, the oil production cut saga and drama will continue to drag on.

And then there’s the fact that no details have been released as of yet. So the question is, how is this provisional agreement to cut production 1.2 million barrels any different than the provisional agreement to agree—from what was already decided two months ago in Algiers? We’re not sure we can answer that.

But never mind the details. Oil prices started rallying early on Wednesday morning as the OPEC meeting in Vienna started. Even though the meeting still ongoing as of the time of writing, and no official statement has yet been issued, crude oil prices continue to surge, and as of 8:45 AM (EST) WTI Crude was trading up 7.1 percent at US$48.44, while Brent Crude was soaring 7.44 percent past US$50, to US$50.84.

Although the optimism is cautious due to the lack of details, OPEC sources, unofficially, have reported that Saudi Arabia has agreed to treat Iran as a special case, allowing it to increase output to around 3.9 million bpd, according to Bloomberg. This caving on behalf of Saudi Arabia is quite telling of the dire economic straits Saudi Arabia is now in.

The Saudis, Iran and Iraq may have overcome this one issue, but we’ve yet to see who will be cutting/freezing how much, how the deal would be monitored, and will members would stick to it at all—and of course—whether it will actually go through if non-OPEC members fail to climb onboard. A situation eerily reminiscent of the meeting in Algiers.

On Tuesday, just a day before the OPEC oil ministers’ meeting, Iraqi Prime Minister Haider al-Abadi told The Associated Press that Iraq would agree to cut its crude oil production as part of OPEC’s efforts to boost prices, because current prices are not sustainable. Related: Ahead Of OPEC’s Meeting, API Inventory Report Shows Major Crude Build At Cushing

The Iraqi prime minister said that he had learned that OPEC would decide to cut its total crude output by between 900,000 bpd and 1.2 million bpd. If a cut were to materialize, it would be a reduction of between 2.7 percent and 3.6 percent from the October levels of 33.643 million bpd, according to OPEC’s secondary sources data.

“Yes, we will take our share and we agreed to this,” the AP quoted al-Abadi as saying.

According to Kenneth Medlock, director at a center for energy studies at Rice University, a commitment to cut by Iraq could send a signal to other OPEC members reluctant to cut to rethink their views.

Last week, it was the Iraqi prime minister who first suggested that Iraq would be joining the OPEC cuts, saying that Baghdad would gain in oil revenues what it would lose in production.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage


Leave a comment
  • Bud on November 30 2016 said:
    This is some seriously entertaining sleight of hand! They are going to cut by a million, but then add back 700k ( since they will still count Indonesia's production, though Indonesia will still operate outside the group and pump as well). They are already at 34 Mbpd in November but not counting that Libya and other exempted could add another Mbpd next year.

    This is not a cut, it is a smoke screen that may have been planned with the re entry of Indonesia last year. McKinsey and the Prince should take this act on the road. They are real good.
  • ka on November 30 2016 said:
    its monopoly , they are mafias its against fair trade and competition , who control oil , Saudi will earn trillions more so they should take their all refugee brothers in saudi arabia ,its their responsiblity. now they will earn trillions they should take there every brother
  • Kr55 on November 30 2016 said:
    Can't help but wonder if OPEC members were playing the market with their statements. Without a doubt they have friends in banks managing their money that were shorting on the way down with the negative OPEC statements, loading up for the announcement and profiting nicely today.
  • Abdul on November 30 2016 said:
    Every OPEC member plans to fill that 1.2 million BBL gap.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play