Wednesday , January 27 2021

Events prices after OPEC countries decide on production cuts

The prices of oil arose sharply on Friday, because important oil tankers, including the OPEC cartel, have agreed to cut global oil production with 1.2 million barrels daily to reduce overlapping.

After two days of meetings, the Petroleum Exporting Countries Organization, which includes the Saudi Arabia and Iraq leaks, said they would cut 800,000 barrels daily for six months of January, although some countries like Iran, who face comprehensive sanctions of the United States , it was granted an exemption.

The balance will come from Russia and other non-OPEC countries. The United States, one of the world's largest producers, is not part of the agreement.

United Arab Emirates, UAE Minister, Suhail Mohamed Al Mazrouei smiles at the OPEC conference meeting and non-OPEC countries at the headquarters of the Vienna-based organization. (Ronald Zak / Associated Press)

"This is an important step forward," said the United Arab Emirates Minister, Suhail Mohamed al-Mazrouei, who chairs the regular meetings in Vienna in his capacity as President of the OPEC Conference.

Oil producers have been pressure to reduce production following a sharp strain in oil prices over recent months. The price of oil fell by 25% just because important producers – including the US – are pumping oil at high rates.

The reduction certainly met the response, awaited by ministers. Immediately after the announcement:

  • Brent raw, the international standard, was $ 3.11 US barrel, or 5.2%, at $ 63.17.
  • New York crude rejection was $ 2.23, or 4.3 percent, higher at $ 53.72 barrel. And
  • West Canada's Choice increased by 12%, up to $ 4.50 barrel up to $ 37.50.
  • And West Texas Intermediate jumped $ 2.25 to $ 53.75 barrel.

Ann Mackenzie, vice president of Wood Mackenzie's petroleum industry, said the production had cut the "oil market" in the third quarter on next year and helped raise Brent prices over $ 70 per barrel.

& # 39; Self-interest finally ends & # 39;

"For most nations, self-interest is ultimately triumphant," she said. "Saudi Arabia has a long-term goal of managing the oil market to avoid the sharp falls and sticks that injure demand and the ability of the industry to develop a proposal. On this, Saudi Arabia also needs higher oil revenues for financing home sauna spending ".

Russia's Energy Minister, Alexander Novak, called negotiations with OPEC countries "quite challenging", but said the decision "to help the market achieve a balanced state".

"I think this is a strong signal to anyone who has doubted that our cooperation continues and we can react to a challenge that the market launches with us," he said in Russian by means of a translator.

OPEC's opposition to non-members as Russia highlights the weak influence of the oil market post that it has ruled for decades.

Increased American oil production

The OPEC-Russia alliance has become necessary in 2016 to compete with the growing oil production of the United States in recent years. With some ratings, the United States this year became the top crude producer.

The court is unlikely to be greeted warmly by the American president Donald Trump, who has been pressing publicly to keep production. On Wednesday he tweeted: "I hope OPEP will support oils, as it is not restricted. The world does not want to see, or need, higher oil prices!"

Iran's oil minister Bijan Namdar Zangeneh arrives at the beginning of the OPEP meeting at its headquarters in Vienna, Austria, on Thursday. (Ronald Zak / Associated Press)

One blockade to an agreement was Iran, the regional rival and partner of OPEP of Saudi Arabia, who disputed the exemption of any cuts, because its crude exports have already been pinched by US sanctions.

Al-Mazrouei said that, finally, Iran was granted an exemption, like Venezuela and Libya.

That "means that the percentage that we will bring among us will be a little higher," he said.

"Within OPEC we are committed to distributing the 800 (thousand bpd) between us and transmit it."

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