Oil Price will Rise Again! OPEC Has Agreed to Cut 1.2 Million bpd from 2019
After two-day conference, OPEC and its Russia-led allies had decided to curb oil output by 1.2 million bpd from January 2019.
The oil price hiked 5% to more than $63 a barrel on Friday as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, referred the two group as OPEC+, had agreed to reduce output by 1.2 million barrel per day (bpd) to drain global fuel inventories and support the market, despite pressure from U.S. President Donald Trump who, on the other hand, would like to keep oil price low.
OPEC+ had come to an agreement that OPEC will cut output by 800,000 bpd from January, while its allies will cut 400,000 bpd from January as well.
Saudi Energy Minister Khalid al-Falih told reporters the kingdom was ready to pump more should a major supply outage occur. “We will not squeeze consumers beyond what they can afford,” he said. Meanwhile, some analysts and market participants said the cut may not be sufficient to end oil’s rout.
“President Trump will not be happy to see today’s headlines, but how strongly he reacts depends mainly on whether crude prices rise strongly as a result in coming days and weeks,” said Bob McNally, president of U.S.-based Rapidan Energy Group.
