Published: Sun, December 11, 2016
Economy | By Melissa Porter

Non-OPEC oil producers to cut output 558000 barrels a day

Non-OPEC oil producers to cut output 558000 barrels a day

With the deal finally signed yesterday in Vienna after nearly a year of arguing within the Organisation of the Petroleum Exporting Countries (Opec) and mistrust in the willingness of non-Opec Russia to play ball, the market's focus will now switch to compliance with the agreement.

Bloomberg reported citing a delegate source.

Following that announcement, Saudi oil minister Khalid al-Falih chimed in saying, "I can tell you with absolute certainty that effective January 1 we're going to cut and cut substantially to be below the level that we have committed to on November 30".

"We managed to gather 25 countries from Opec and non-Opec with the idea of stabilizing the oil market and defending a fair price for our commodity", Venezuelan Energy Minister Eulogio del Pino said before the meeting.

OPEC members also confirmed their commitment to the plan to reduce the oil supply by 1.2 million b/d.

Opec's 13 members - Algeria, Angola, Ecuador, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela - all placed their own differing budget pressures and market share priorities on the table whenever the issue of output slashing came up.

Saudi Minister of Energy, Industry and Mineral Resources Khalid Al-Falih told the press conference that 2017 would be a "good year" for the global oil market.

The deal, if complied with, would represent an unprecedented level of cooperation among oil-producing countries.

Even more production cuts to crude oil are coming.

UAE then followed suit and also announced that it would take similar action.

According to the ministry's Twitter account, Russian Federation agreed to cut oil production by 300,000 barrels per day, Mexico - by 100,000 barrels per day and Kazakhstan - by 50,000 barrels per day. Now, both OPEC and non-OPEC oil exporters are trying to push prices up. After last week's announcement oil jumped more than 10 percent but analysts are skeptical if a sustained price rally will stay in place. The prices continued to go up on Friday amid speculation that non-OPEC countries would agree to cuts.

Crude prices have risen since the OPEC agreement was announced, with US crude up 1.3 percent on Friday at $51.48 a barrel, 6 percent higher than before the OPEC announcement.

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