Oil prices stabilized on Friday after OPEC's decision this week to cut crude output in order to rein in a global glut fueled the biggest weekly rally since 2009.
After the deal was announced on Wednesday, the market's focus now shifts to the implementation and impact of OPEC's first production agreement since 2008, which will be joined by non-OPEC producers.
inRead invented by Teads
Crude prices on Friday were pressured by data showing oil output in Russia rose in November to a post-Soviet high and news that Moscow would use its record November oil production as its baseline when it cuts output. Front-month Brent crude futures were up 20 cents at $54.14 per barrel by 11:26 a.m. ET (1626 GMT). The contract was up around 14.5 percent this week.
U.S. West Texas Intermediate (WTI) futures rose 23 cents to $51.29. They were on pace for a gain of about 11 percent.
Well let's see just what he had to say then rather than vague inferences:
Oil price So, the organisation got it together roughly as expected but is this an early Christmas present or trouble by Easter? As with any Opec agreement, particularly those burnished with gilt, the proof of the pudding is in the eating, will they deliver on the agreement reached yesterday after an unusually long meeting? The 1.2m b/d is at the top end of expectations and individual countries are much as expected. Iran has actually had its reference production level increased to 3.975m b/d which they may not achieve but Iraq has taken a cut which shows more than a bit of willing. With the Saudi’s taking their 500/- cut it is clear that they have led by example, possibly influenced by the head of corporate finance and his warnings about needing a stable background for the Aramco float.
The stated aim for the price is somewhere in the $55-60 range which for most exporting Governments and companies even they would take your hand off for. Whatever the last two years has done for the industry it has re-balanced their costs, to such an extent that for many E&P companies that price means revenue and profit, for the majors the dividends are safe for the time being.
The EIA inventory stats put a thin layer of icing on the cake, the draw of 884/- was better than the whisper of a 678/- build and whilst inventories in products built, particularly in distillates the market breathed a sigh of relief all round.
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