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Published: Fri, December 02, 2016
Global Media | By Abel Hampton

Oil prices static on uncertainty over planned production cut

Oil prices static on uncertainty over planned production cut

OPEC will debate an oil output cut of 4.0-4.5 percent for all of its members except Libya and Nigeria next week but the deal's success hinges on an agreement from Iraq and Iran, which are far from certain to give full backing.

The post Oil prices rise on planned OPEC-led production cut appeared first on Punch Newspapers. "We are discussing. We are not disagreeing", Libyan OPEC governor Mohamed Oun said and replied "yes" when asked whether the day had gone well.

Now, led by Saudi Arabia, Opec is due to meet on November 30 to coordinate a cut, potentially with non-OPEC members like Russian Federation, the world's largest producer, but there is disagreement within the producer cartel as to which member states should cut and by how much.

Iraq's oil minister Jabar Ali al-Luaibi will make suggestions at a meeting of OPEC oil ministers at the end of the month to implement an agreement to restrain crude supply in order to push up prices, according to a statement from his ministry on Monday.

This would bring more United States oil to the market and push down prices. The matter will be deferred until the ministerial meeting on November 30, two delegates said. It was initially agreed upon then that the Organization is to reach a goal of decreasing their oil output to around 32.5 million to 33 million barrels per day. Brent crude futures contracts for January 2017 delivery were trading at $48.69 per barrel, a drop of ~0.43%.

But, prices fell, with US futures down $1 a barrel, following reports the 14-member cartel would defer a decision on a deal until the November 30 meeting due to the opposition of Iran and Iraq.

OPEC officials tried to draw up the details of an agreement to cut output before a formal meeting during the second assembly of the High-Level Committee.

The Energy Information Administration (EIA) is due to publish official U.S. crude oil and refined product inventory data later on Wednesday. Government data due Wednesday is forecast to show a gain.

While Russia, the largest crude supplier outside OPEC, has reiterated its preference for a freeze over a cut for several months, members of the group including Saudi Arabia had been expecting the nation would eventually join a reduction, according to people briefed on the matter.

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