Opec to discuss extending oil cuts by more than 3 months

Katrina Barker
September 13, 2017

To take note of, both Saudi energy minister Khalid al-Falih and his Venezuelan counterpart, Eulogio del Pino, reportedly said their two countries were already exceeding their commitments under the output cut deal.

The Organization of the Petroleum Exporting Countries (OPEC), of which Saudi Arabia is the de facto leader, and other producers including Russian Federation, have agreed to curb their output by around 1.8 million barrels per day until next March.

The market was assessing Irma's effect on demand, even as refinery restarts in the wake of Hurricane Harvey boosted expectations for crude oil consumption. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.10% at $48.11 a barrel.

Oil prices rose on Tuesday after OPEC forecast higher demand in 2018 and Russian Federation and Venezuela confirmed their commitment to a production-cutting deal to reduce the global crude glut.

About 6.1 million customers were without power following Hurricane Irma, down from a peak over 7.4 million late Monday, according to local utilities.

At the same time, prices have stubbornly stayed around US$50 a barrel after the initial spike, in large part thanks to growing output from the two exempted OPEC members, Nigeria and Libya. The increasing numbers of operating rigs, as well as increasing production, have been raising concerns that the USA shale oil producers which were able to cut their production cost dramatically over the past years are now a low-priced global competitor and would continue to undermine the OPEC agreement to cut supplies. Mark Zandi, the chief economist at Moody's Analytics, said the US economy could suffer lost revenue from the storms and the estimate for third-quarter gross domestic product could drop a half point to 2.5 percent as a result. Recent Hurricane Harvey that battered Gulf Coast and led to refinery outage in tune of 4.2 million barrels per day, has pushed the landlocked WTI price lower.

Crude prices are down 8.6% in the past year.

Al-Falih said longer-lasting curbs "would be considered in due course as market fundamentals may dictate".

On September 8, energy services company Baker Hughes (BHI) released its weekly United States crude oil rig count report.

Other reports by AllAboutTopnews

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