Oil prices bounce as OPEC and its allies agree to slash output

0 Comment(s)Print E-mail Xinhua, December 8, 2018
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NEW YORK, Dec. 7 (Xinhua) -- Oil prices rebounded on Friday, after OPEC and its allies including Russia have agreed to cut production next year to shore up falling oil prices.

OPEC and its allies inked a deal to reduce output by 1.2 million barrels per day (bpd) during the first six months of 2019 after their second-day meeting in Vienna, Austria, which has roughly met market expectations.

OPEC members are set to slash output by 800,000 bpd, while non-OPEC producers will cut 400,000 bpd. The reduction volume came out in face of U.S. President Donald Trump's repeated calls for lower oil prices.

As Russia showed willingness to cooperate with the Saudi-led oil cartel ahead of the meeting, the country agreed to decrease output by 228,000-230,000 bpd, according to Russian Energy Minister Alexander Novak. Yet he said Russia would cut its production gradually given the harsh winter conditions.

Saudi Energy Minister Khalid al-Falih told reporters that the kingdom would deliver on its promise and take actions without delay, as its production will possibly fall to 10.7 million bpd in December and 10.2 million bpd in January.

"This is partly driven by our commitment to start on the right foot in 2019 and to demonstrate that delivering on this agreement is not going to take a long, protracted period of gradually winding down," Falih said. "We say what we mean and we deliver on what we say."

Yet the United States continues to be the largest source of supply, as it has become a net oil exporter for the first time in 75 years with its exports exceeding imports last week.

The West Texas Intermediate for January delivery was up 1.12 U.S. dollars to settle at 52.61 dollars a barrel on the New York Mercantile Exchange, while Brent crude for January delivery rose 1.61 dollars to close at 61.67 dollars a barrel on the London ICE Futures Exchange. Enditem

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