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OPEC agrees oil output cut, no final figure yet - delegate

13 December 2018

However, these days OPEC was facing considerable pressure to keep oil prices down.

That has created a dilemma for Saudi-led OPEC, which wants to maintain higher prices but avoid ceding more market share to shale producers.

After much back-and-forth between producers in Vienna, Opec and allies agreed to collectively cut production by 1.2 million barrels a day, with the cartel shouldering 800,000 barrels a day.

But OPEC is trying to stabilize oil markets after United States crude prices plunged 22% in November, marking the the worst month since the global financial crisis in 2008.

Another source said Tehran wanted an OPEC communique to specify that Iran was exempt from cuts. They even tapped into their strategic resources to show Trump their full support for his plans. Russia, on the other hand, has a more diversified economy, and can live with oil at $40 per barrel. In Trump's world everybody was happy until warning alarms started to wail. "OPEC has given the oil market a rudder that appeared largely absent".

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Saudi Arabia doesn't wield the same level of power on the oil market - thanks in part to US shale oil production - as it did in 1973, when it triggered an oil embargo against Western countries for supporting Israel. "Are there enough signs that this US$50-US$55 price range is low enough to limit the growth of United States shale production so 1.2 million barrels is enough, and will it be enough in the face of what we see as a slowing global economic environment?"

The pact will come into force on January 1 and will last six months, the Iranian Minister of Petroleum, Biyan Zanganeh, told the press. In early trading, the global benchmark had dropped below $60 when it looked as if the oil exporters might leave output targets unchanged.

It is worth Recalling that on 6 December in the market of cheaper oil.

Al Falih told reporters in Vienna that OPEC will seriously consider views of world leaders like Modi, who represent the voice of major consuming nations, before taking a decision on cutting output.

Now every day the world produces about 1.8 million barrels.

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Trump insists he will stick by Riyadh despite the outrage but he has been also ramping up the pressure for more oil.

But OPEC and its partners moved ahead with plans to cut production after meetings this week in Vienna. In the past, it was been surging US production numbers. First and foremost it proves the importance of OPEC+ when it comes to the overall aim of balancing the markets.

Being a very smart politician, Putin is known for his tactical behavior and keeping both friends and enemies close. All eyes were then on Friday's meeting of OPEC+.

Moscow was definitely reluctant to lower its output, to the extent Falih and others within the Opec wanted.

However, during the meeting, the deal was hung in the balance for two days.

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In order to put an end to crude oil prices, the organization of oil producing countries has agreed to cut the oil production.

Four OPEC and non-OPEC sources claimed Iran, which came under fresh U.S. sanctions in November, was also holding up a final deal.

OPEC countries are mulling a possible cut to oil production in an attempt to stabilize prices as they meet for a second straight day.

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OPEC agrees oil output cut, no final figure yet - delegate