Russian, OPEC Ministers to Meet This Week on Oil Output Cuts

The price is now 15.5 cents more expensive than it was in the same week a year ago.February West Texas Intermediate Crude Oil finished November at $50.34, up $2.29 or +4.77%. The ratings agency expects Brent crude to remain range-bound at around $50-55 for the first half of calendar year 2017. Distillate production averaged about 5.1 million barrels a day last week, down about 100,000 barrels compared with the prior week’s production.”And I think that’s a good thing makes it more hard for OPEC to actually reach an agreement and. for that agreement to actually enter into force, because they can’t control the oil market like they used to be able to”. His opinion goes counter to observers who suspect OPEC members are likely to cheat in their compliance with new output targets, including Saudi Arabia’s former Oil Minister Ali al-Naimi. OPE members are famed for surpassing production plans. Investment was declining even at $50 a barrel, he said. Attention is now shifting to OPEC’s compliance with the accord and efforts to persuade other producers to cooperate. Because the agreement refers to production and not exports, having extra barrels in storage is a good strategy for maintaining market share once the cuts are realized.Russian Federation has pledged to “gradually” reduce production by 300,000 bpd next year.However, Starkey said the rally’s “sustainability is sure to be questioned” as investors wait to see whether OPEC adheres to its own production limits.The deal nearly failed to come to fruition because of excessive demands from Iran. The new agreement will allow Iran to ramp up production by 90,000 barrels a day to just below 3.8 million barrels a day. Refineries were running at 90.4% of capacity, with daily input averaging over 16.4 million barrels, about 134,000 barrels a day more than the previous week’s average.Libya and Nigeria have also been granted an exemption from the cut.”There is a clear need to ensure that prices are supported and stabilized”, Barkindo said in a speech at an industry conference in New Delhi, India on Monday, according to an OPEC press release.The document to finalize the finalize the global oil output-limiting pact is scheduled to be inked on December 10 in Vienna.Many analysts regard OPEC’s production cut as constructive for the market in the near term, but the issue is that American producers are ready to bring more oil to the market, in case oil prices rise significantly. There doesn’t seem to be any reason to chase this market higher until the actual cuts are implemented in January.So far, four non-cartel members have said they will attend Saturday’s meeting in Vienna.