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 24, 2018
What you should know about the Opec meeting
OPEC's deal to release more supply centres on returning to 100 percent compliance with existing, agreed cuts. Since a year ago , OPEC and its allies have been participating in a deal to cut output by 1.8 million bpd.

June 22, 2018
People of different nationalities join mats on International Yoga Day
In West Bengal, neither chief minister Banerjee nor any of her ministers participated in any yoga session anywhere in the state. The message of Hon'ble Prime Minister of India on the occasion of International Day of Yoga was also screened.

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
Twitter erupts as Cristiano Ronaldo inspire Portugal to their second victory
Cristiano Ronaldo has become the second leading global goalscorer of all time after finding the back of the net against Morocco . Good afternoon and a warm welcome to our coverage of the Group B game between Morocco and Portugal .

June 19, 2018
Japan upsets Colombia at World Cup
They're finding space now, and Kagawa slides left to Inui, who comes inside, opens his body and curls towards the far corner. David Ospina had come for the cross, leaving a big target for Osako, but the header was perfectly placed into the corner.

June 17, 2018
Gimenez gives Uruguay last-gasp win against Egypt
Egypt next face hosts Russian Federation on Tuesday before concluding their group-stage campaign against Saudi Arabia on 25 June.

June 15, 2018
‘Teen Mom’ star Farrah Abraham arrested at Beverly Hills hotel
Former "Teen Mom" star Farrah Abraham was arrested Tuesday night after an altercation at the Beverly Hills Hotel . Authorities also said that Abraham exhibited signs of intoxication during the investigation.

June 13, 2018
[US-NK Summit] North Korea lauds, and basks in, Kim's summit performance
Graphologist Koo Bon-jin said Mr Kim's signature suggested an ambitious man who is "intuitive, rather than rational and logical". That doesn't seem to pin the North down to the concrete and unilateral measures Trump said he would demand going into the talks.

June 12, 2018
Congress skeptical of Trump's G7 strategy
Trudeau fires back on May 31 over the tariffs being applied on the premise Canada poses a national security threat to the U.S. In an interview Sunday on German public television, Merkel also says European leaders won't be "taken advantage of" on trade.

June 11, 2018
4 servicemembers wounded in Somalia treated, released — U.S. military
The attack occurred at an outpost 60 miles northwest of Kismayo of combined American, Somali and Kenyan forces. A U.S. commando killed in a Somalia firefight against al-Shabaab militants was identified as U.S.