Home » Money

OPEC, Russia agree to slash oil output despite Trump pressure

11 December, 2018, 00:22 | Author: Shawna Walton
  • The U.S. exported more oil gasoline and other petroleum products than it imported in the last week of November. Katie Howell  E&E News

"The OPEC+ cut is fuzzy on details and will likely result in less reduction than the headline figure of 1.2 million bpd", said Bob McNally, president of USA -based Rapidan Energy Group.

Saudi Arabia doesn't wield the same level of power on the oil market - thanks in part to USA shale oil production - as it did in 1973, when it triggered an oil embargo against Western countries for supporting Israel.

Oil prices spiked sharply higher Friday as major oil producers, including the OPEC cartel, agreed to cut global oil production by 1.2 million barrels a day to reduce oversupply.

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

Oil prices crept up as discussions rolled into day two, with Brent Crude and West Texas Intermediate (WTI) both seeing an increase during London trading hours.

Oil prices went up about 5%.

The escalation of the US trade war with China was also starting to show its impacts on the world's economy in the form of lower oil demand.

An output reduction would provide support to Iran - OPEC's third-largest producer - by increasing the price of oil amid attempts by Washington to squeeze the country's economy.

The surge of USA oil production, which has increased by 2.5 million bpd since early 2016 to 11.7 million bpd, has given OPEC and other oil pumpers more pressure in global market competition. Iran said that it has been exempt from the deduction because it is already facing American sanctions.

Junior oil firm Bonterra Energy Corp. announced last month it would cut its monthly dividend to a penny from 10 cents per share because of low oil prices. The United States recently reimposed sanctions on Iran that had been lifted during the Obama administration.

Russian Federation gave a commitment to reduce output by 228,000 bpd from October levels of 11.4 million bpd, though it said the cuts would be gradual and take place over several months.

Thus, the total oil output in OPEC+ countries will be cut by 1.2mln bpd (by 800,000bpd for OPEC countries, by 400,000bpd for non-OPEC countries) or from 2% to 2.5% for each country.

OPEC ministers came to Vienna recognizing the economic realities. The U.S. imports more than 7 million barrels a day of crude from all over the globe to help feed its refineries, which consume more than 17 million barrels each day.

January natural gas NGF19, +4.00% rose 3.7% to $4.488 per million British thermal units, but still suffered a weekly drop of 2.7%. Hittle and Investec bank said Brent could return to $70 a barrel next year, while others said a bigger cut was required to reach that level.

Physical markets were taken aback by the United States granting waivers on the Iran sanctions to the eight largest importers of Tehran's crude. Possible trade wars between U.S.

Recommended:

  • It's time to watch The Game Awards together

    It's time to watch The Game Awards together

    This includes YouTube , Twitch , Twitter , Facebook , Mixer , Steam , Xbox One, PS4, IGN and Gamespot in America. Do you agree with Liam that the amount of teases towards what's coming next is getting a little bit too much?
    Louvre, Eiffel Tower close in Paris amid mass, violent protests

    Louvre, Eiffel Tower close in Paris amid mass, violent protests

    The climbdown marked a major departure for a president who had vowed, unlike predecessors, not to be swayed by mass protests. He said he hoped that Saturday was the last day of demonstrations, adding that it amounted to "a crisis of identity".
    Marine Corps Punishes 2 Aviators over Sky Penis Incident

    Marine Corps Punishes 2 Aviators over Sky Penis Incident

    The Marine Corps offered little information in a statement about the incident, which occurred at 2am (4am AEDT) on Thursday. Officials who spoke on condition of anonymity were unsure how the mishap may have occurred but none suspected foul play.
  • Premier League 2018/19: 3 reasons why Liverpool beat Bournemouth

    Premier League 2018/19: 3 reasons why Liverpool beat Bournemouth

    Salah's shredding of doubts - he had scored nine goals before Saturday, compared with 19 at the same stage last season - is... Liverpool must win 1-0 or by at least two goals if Paris Saint-Germain beat Red Star Belgrade.
    Nationals sign free agent pitcher Patrick Corbin to 6-year, $140M deal

    Nationals sign free agent pitcher Patrick Corbin to 6-year, $140M deal

    According to multiple media reports , Washington has signed former Arizona Diamondbacks ace Patrick Corbin to a six-year contract. While the details of Corbin's deal have yet to be disclosed, his average salary is $23 million per year.
    An Urban Meyer rival is so happy for him

    An Urban Meyer rival is so happy for him

    He certainly has a great offensive mind, but he's not Meyer, who outside of Nick Saban , is the best coach in college football . Despite the controversial blip in his career, Meyer easily had one of the most successful coaching careers of all time.
  • Bournemouth 0-4 Liverpool: Key winners & losers as Salah scores three

    Bournemouth 0-4 Liverpool: Key winners & losers as Salah scores three

    The pick of the goals was his third after rounding Begovic twice and taking his sweet time before completing his hat-trick. When offered the award after the match, Salah flat out refused to accept it, and gave it to James Milner instead.
    Heather Nauert 'to replace Nikki Haley as US envoy to UN'

    Heather Nauert 'to replace Nikki Haley as US envoy to UN'

    Haley similarly had little foreign policy experience when appointed, although she had a national name as the governor of SC . Nauert would take up the USA mantle at the United Nations including holding sanctions on North Korea and defending Israel.
    Trump hopes to meet Kim early 2019

    Trump hopes to meet Kim early 2019

    Trump and Xi agreed that "great progress has been made with respect to North Korea ", the White House statement added. The president tells reporters that there are three sites under consideration, but he's not identifying them.
  • Trump mocks Macron again over French fuel tax protests

    Trump mocks Macron again over French fuel tax protests

    On Saturday, French police cracked down on protesters around the famous Champs-Elysees in Paris with tear gas and water cannons. France has been rocked by protests since November 17 against the rising fuel taxes and the government's pro-business agenda.

    Spider-Man: Far From Home Marketing Hides Avengers 4 Spoilers

    Beck was a special effects wizard who was so frustrated with his Hollywood career he turned to supervillainy. Spider-Man: Far From Home stars Tom Holland , not Gyllenhaal, in the lead role, and comes out in July 2019.
    George Conway Suggests Trump Tweet Obstructed Justice

    George Conway Suggests Trump Tweet Obstructed Justice

    Trump's post was part of his latest morning tirade against special counsel Robert Mueller and those involved in that investigation.


Popular

The royal wedding-inspired baby names that will be big in 2019
I did a few things wrong, said a few things I should not have said", Thomas said in an interview with the Daily Mail . Meanwhile, Ms Touabti left her job at Kensington Palace just six months after Meghan married into the Royal Family .

Solari praises out of favour Isco after Copa del Rey double
Dani Carvajal is set to start at right-back, with former Chelsea stopper Thibaut Courtois between the sticks ahead of Keylor Navas.

Iran’s FM: Terror Attack in Chabahar Not to Go Unpunished
A number of Iranian media have reported a vehicle explosion in the largest port city in Sistan-and-Balochistan province, Chabahar. An Iranian ethnic Arab separatist Sunni militant group and Islamic State both claimed responsibility for that attack.

Fortnite's new Creative mode is Epic's answer to Minecraft
Like many Fortnite emotes , the dance later appeared in the game as a purchasable emote and was renamed to "Swipe It". It may be hard to believe now, but Fortnite ( Android , iOS ) wasn't a battle royale game originally.

How will the NHL's expansion to Seattle affect the Flyers?
Starting with the 2021-22 season, the Seattle franchise will play as part of the Western Conference in the Pacific Division. Houston, Quebec City and Toronto have all been touted as possible new homes someday, but they'll also have to wait.

Norway's Hegerberg wins inaugural Ballon d'Or award
Hegerberg was the leading scorer with 15 goals as Lyon won the Champions League for the third year running. According to a report by the Mirror UK, the Norway worldwide went to leave the stage after her address.

Cheney biopic 'Vice' tops Golden Globes nominations; Thomasin McKenzie misses out
This year, she became the first actress of Asian ethnicity to receive an Emmy nomination for drama series lead, for Killing Eve . The ceremony, conducted by the Hollywood Foreign Press Association , will be held on January 6.

Qualcomm releases more Snapdragon 855 details
As for when, exactly, OnePlus's 5G phone launch will happen, that hasn't been pinned down. They'll be joined by additional cities over the course of the year.

XFL Unveils Eight Cities, Venues for Teams to Launch in February 2020
It intends to find players who are struggling to find a job in the National Football League , and from the college ranks. Kickoff for the XFL will be February 8-9, 2020, following the Super Bowl, as the league runs during the NFL's offseason.

George H.W. Bush’s funeral and memorial services plan
Mayor Sylvester Turner is hosting Monday evening's event featuring music and community leaders in front of City Hall. President Trump has ordered the federal government to be shut down Wednesday for a national day of mourning.