OPEC reaches a deal to cut production (02 December 2016 17:46)
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Date: 12 December 2015 10:07
Baku, Azerbaijan, Dec. 10
By Khalid Kazimov – Trend:
OPEC Basket Oil Price stood at $34.80 per barrel on Dec.9, plunging to its lowest level since December 29, 2008.
According to the latest price updates, released on OPEC website, the Cartel's basket oil price decreased by more that $3 on Dec.9, compared to Dec.3 when OPEC members start 186-th Ordinary Meeting.
During the meeting, OPEC members failed to agree an oil production ceiling as Iran pledged to boost its output by one million barrels per day in 2016.
For the first time in decades, OPEC oil ministers dropped any reference to the group's output ceiling, highlighting disagreement among members about how to accommodate Iranian barrels once Western sanctions are lifted.
Tehran argues that the Islamic Republic has to restore its output scaled back since international sanctions imposed against its oil industry. Iran also speculates that its output will be absorbed in market.
While Saudi Arabia believes to protect market share and to win non-OPEC producers the cartel has to keep pumping crude into market as it predicts the demand for oil will increase in the coming year.
Saudi Arabia, by producing 10.25 mb/d of oil in the third quarter of 2015, ranked first among OPEC member countries in terms of crude production, followed by Iraq with 4.33 mb/d.
OPEC's crude oil production increased to 31.5 mb/d during last two years, 1.5 mb/d more than the determined 30 mb/d.
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