Daily Trends Now
Daily Trends Now


Saudi pledges 'measurable' oil supply boost as OPEC, Russia agree deal

Saudi pledges 'measurable' oil supply boost as OPEC, Russia agree deal

"Each country which has produced less (than its allocation) can produce more".

Oil prices rallied Friday, with U.S. crude futures up almost 6% for the week, as OPEC members agreed to raise output but by an amount that appears to be less than the market had anticipated.

"The only country that can increase production is Saudi Arabia, so its interpretation of the deal is the one that matters", said Ann-Louise Hittle, a veteran OPEC watcher at consultant Wood Mackenzie Ltd.

Saudi Arabia said the move would translate into a nominal output rise of around 1 million barrels per day (bpd), or 1 percent of global supply, for OPEC and non-OPEC producers.

OPEC and its allies yesterday gathered for a third successive day of meetings in Vienna to give the final sign-off to an oil production increase.

Opec and its allies have since past year been participating in a pact to cut output by 1.8 million bpd.

Saturday's accord, in which non-OPEC countries ratified the previous day's deal, dropped the pledge that the 1 million barrel-a-day increase should be shared proportionally among members, opening the way for the full volume to flow, Al-Falih said. The measure had helped rebalance the market in the past 18 months and lifted oil to around $75 per barrel from as low as $27 in 2016.




The output boost agreed on Friday had been largely priced into the market and was seen as modest. If we lose a million bpd of output from Venezuela and Iran in the fourth quarter, where will all these barrels come from?

Falih has warned the world could face a supply deficit of up to 1.8m bpd in the second half of 2018 and that Opec's responsibility was to address consumers' worries.

Following the meeting, Angolan Oil Minister Diamantino Azevedo said: "We have agreed".

The group's communique still pledged a return to 100 percent compliance with the original 2016 agreement - ending a period of deeper-than-intended cuts - but Al-Falih insisted that no individual country will be subject to a strict output cap. Intent enough to raise oil production to keep the agreement in place.

The Minister of Energy and Industry of United Arab Emirates (UAE) Mr Suhail Al Mazrouei, made the decision known at a news conference after the 4th OPEC and non-OPEC Ministerial Meeting in Vienna on Saturday. Iran has objected to having members with additional capacity such as Saudi Arabia fill Venezuelan output gaps.

An Iranian OPEC delegate immediately criticized the Saudi position, saying the agreement didn't allow any member to replace someone else's market share.

Saturday's deal, after a third day of talks, is a win for Saudi Arabia and Russian Federation, which hold the most spare capacity and were the first members to suggest an increase. Zanganeh has said the USA president is to blame for high prices because of his unilateral withdrawal from the worldwide nuclear agreement and the imposition of fresh sanctions that could significantly curb Iran's crude exports. Much will depend on how much extra crude comes back on to the market, the robustness of American shale drillers, the fate of Venezuela's crisis-hit oil industry and the impact of United States sanctions on Iran.

follow

editors' picks

June 25, 2018
Nintendo and Microsoft Partner to Promote Console Cross-Play
A surprise Fortnite players were rudely greeted to when they tried to log into their account (tied to PS4 ) on Nintendo Switch . Microsoft and Nintendo have taken the opportunity to remind gamers out there that cross-play exists on other systems.

June 24, 2018
U.S. tariffs on cars could affect $400b in trade
He has frequently criticized both allies and adversaries for imposing tariffs and trade barriers on American goods. While the results of that investigation are still weeks away, Trump raised the specter of tariffs on Twitter.

June 23, 2018
NBA Draft: Who is Svi Mykhailiuk, the Lakers' 47th pick?
The 2018 draft marked the end of the Lakers' penance for the 2012 sign and trade in which they acquired Steve Nash. But executing the Lakers' longtime goal of becoming a title contender this summer still will be no easy task.

June 21, 2018
San Antonio Spurs: Kawhi Leonard still ‘irate’ with Tony Parker’s comments
With a lot of young players already on the team, making three selections in the draft this year does seem a little unlikely. Popovich even suggested that Leonard might be better than LeBron James a year ago.

June 20, 2018
Coutinho expects more Neymar punishment at World Cup
We have to be very cohesive as a team and close the gaps when we confront those individual players. We will continue to play with that consistency".

June 20, 2018
Kawhi Leonard wants to a trade from Spurs
We can expect plenty of developments between now and the draft, but it appears Leonard may have played his last game as a Spur . Thus, everyone has been dreaming up their own Kawhi Leonard trade scenario with the Los Angeles Lakers .

June 15, 2018
Meghan is shown the royal ropes - by the boss
We can only imagine how nervous Prince Harry's other half must have been feeling, but she didn't seem to show it. A number of Meghan's co-stars watched her tie the knot with Prince Harry at Windsor Castle on 19 May.

June 13, 2018
Here's a look at the major announcements by Microsoft at E3 2018
Xbox Live players are up 13 percent and Xbox One sales are up 15 percent over the same period past year , but that's not all. What platforms will Halo Infinite be released on? Microsoft's Xbox One X is already on a really strong footing.

June 12, 2018
North Korean leader Kim, Trump both arrive in Singapore ahead of summit
However, he took a U-turn soon and said the White House was proceeding with the preparations for the summit. Olivia Enos of the USA -based Heritage Foundation is urging Trump to not ignore rights concerns.

June 11, 2018
E3 2018: Watch The New Battlefield 5 Trailer
Electronic Arts and developer DICE confirmed that Battlefield V is getting a battle royale mode at some point in the future. The battle royale format mode will be called "Royale", although no further details were revealed during conference.