Breaking News. OPEC nations are reported to have finally agreed to cut their oil production all the way down to 32,5 million barrels a day. This means that they are going to cut the quotas by 1.2 million barrels a day. Reuters and Bloomberg have already confirmed this information, with reference to reliable sources.
It turns out that OPEC members have managed to agree on oil production cuts for the first time since 2008. The agreement was reached earlier today as the result of the recent OPEC summit in Vienna. For the sake of comparison, October’s OPEC report on oil production indicated an increase up to 33,64 million barrels a day. Now, Brent oil is well above $50/b as expected. WTI oil is almost $49/b.
Back in 2008, OPEC agreed to cut their production by 2,2 million barrels a day, which turned out to be the biggest production cut in the history of OPEC. For those of you who don’t know, the preliminary agreement was reached in late September in Algeria. Back then, they agreed to cap oil production at 33 million barrels a day and then to cut it all the way down to 32,5 million barrels per day.
At the same time, Iran reports that Russia is ready to join the decision to cut oil production if OPEC does so as well. According to Reuters, OPEC expects non-OPEC oil producers to cut their oil production by 600 000 barrels per day as well. Most of the production cut is expected to come from Russia – 400 000 barrels per day. The market is optimistic about the results of the OPEC summit.
