The president of Lipow Oil Associates discusses the crude market.
OPEC members and their allies have tentatively agreed to cut oil production by 500,000 barrels per day, Reuters reports, citing sources.
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OPEC would remove 340,000 barrels while non-OPEC producers, including Russia, would cut production by 160,000 barrels, the report said. A sticking point in the talks had been how to share the split the cuts between producers.
Expanding on previous reductions, the agreement would remove a total of 1.7 million barrels, or about 1.7 percent of global supply.
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Saudi Arabia has been bearing the burden of the largest share of production cuts recently, but some countries have been producing more than expected. Analysts note that if countries are already not complying with the current agreement, voting for more cuts could be pointless.
Brent crude oil, the international benchmark, dropped 0.3 percent to $63.21 per barrel while West Texas Intermediate crude oil was down 0.5 percent to $58.13. Oil prices were trading at their highest levels in more than two months ahead of the decision.
Friday’s decision comes after the oil cartel in July agreed to a nine-month extension of production cuts that began in January 2017, when oil prices were about 10 percent below current levels.
The next OPEC meeting is scheduled for March 5. OPEC members and their allies will meet on March 6.
This story is developing. Check back for updates.
