The two-day annual meeting of the organization of the petroleum exporting countries (OPEC) concluded on the afternoon of December 7 local time. Major producers, including non-opec countries like Russia, negotiated a new agreement to cut output by 1.2 million barrels a day. As the figure was larger than market expectations, international oil prices immediately jumped.
In total of 1.2 million barrel/day, as reported by bloomberg, OPEC will cut 800,000 barrel/day, non OPEC will cut 400,000 barrels per day, of which Russia will cut about 2.3 million barrels/day. The market had been more pessimistic about the final cut because Russia had been resistant to large cuts. On December 6th Saudi Arabia, the energy minister of Opec's biggest producer, said he thought 1m b/d would be enough.
In addition, Iran secured a last-minute waiver of production cuts. Iran's energy minister said this week that he would not participate in the production cuts because of U.S. sanctions.
As of December 7, Beijing time, at 21:57, the February delivery of brent oil futures is up 4.71% to $62.89, and WTI oil futures in January is up 4.41% to $53.76 per barrel.
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