Oil prices rise on planned Opec cuts

OPEC decisions aren't shaped by Twitter: Russia

Following the OPEC and non-OPEC ministerial meeting, the two parties reportedly agreed to cut oil production by a cumulative 1.2 million barrels per day - 0.8 million bpd by OPEC members and 0.4 million bpd by allied producers. The statement, which may have been written on Thursday, the day of the OPEC meeting, didn't specify the output cut by nonmembers, which include Russian Federation, but news reports have pegged the nonmember cuts at 400,000 barrels a day to bring the total reduction to 1.2 million barrels a day.

USA shale producers cheered OPEC's decision to trim output, a move that sent crude prices higher on Friday, closing at levels that oil executives said would keep their profits flowing. Trump has backed Saudi Crown Prince Mohammed bin Salman despite calls from many USA politicians to impose stiff sanctions on Riyadh.

An output reduction also would provide support to Iran by increasing the price of oil amid attempts by Washington to squeeze the economy of OPEC's third-largest producer. Another source said Tehran wanted an OPEC communique to specify that Iran was exempt from cuts.

Amid worldwide pressure over the October 2 killing of Jamal Khashoggi in the Saudi consulate in Istanbul, it seemed that MBS needed the support of the White House too much.

Saudi Arabia faces pressure from U.S. president Donald Trump to help the global economy by refraining from cutting supplies.

I'd still say that a deeper cut would be needed to really see oil rally back to $70.

The deal was reached after Iran was granted exemption from curbing its output due to USA sanctions.

Mazrouei, who is also the United Arab Emirates' minister of energy and industry, said the agreement had been a success and shown "positive progress on removing the inventory overhang".

He added that the 14 OPEC members would curb their output by 800,000 bpd while the 10 non-OPEC allies would contribute a 400,000 bpd reduction.

Iranian Energy Minister Bijan Zangeneh had said his country should not be forced to cut production in light of US sanctions on the Islamic Republic, which are backed by the Saudis.

Iraq, OPEC's second-largest producer, pledged to cut 140,000 bpd.

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A total of 1.2 million barrels of oil a day are set to be removed from the market.

Iran, Libya and Venezuela were effectively given exemptions.

The previously agreed arrangement expires at year-end.

But, some remain skeptical that the deal is enough to make a dramatic change in the oil market.

"Saudi economic self-interest trumps Trump, " said Mike Rothman, president of Cornerstone Analytics Ltd., a veteran of three decades of OPEC meetings.

Meanwhile, Iran is still selling crude despite sanctions. "We don't know the Iranian volumes which will be coming off the market", Croft said.

"Although we don't think that the current pricing differentials between Canadian barrels and USA barrels will be permanent, we are obligated to our shareholders to protect our business and our balance sheet until Canadian prices improve", said Cardinal in a news release.

Saudi Arabia's Oil Minister Khalid Al-Falih talks to journalists at the beginning of an OPEC meeting in Vienna.

Saudi Arabia first denied the Hook-Falih discussion took place but later confirmed it.

On paper, the shift to net oil exports means that the U.S.is today energy independent, achieving a rhetorical aspiration for generations of American politicians, from Jimmy Carter to George W. Bush. The price of oil has fallen about 25 percent recently because major producers - including the USA - are pumping oil at high rates. "In June, Saudi Arabia and Russian Federation added 650,000 barrels per day", he said.

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