Opec Production Cut Historical Deal Or Realism?
Cooperation and Fundamentals Support Price Increase
The oil market again has been surprised by Opec, with its decision that it will cut its production volumes from 2017 onwards. Based on the first statements made by ministers at an unofficial meeting in Algiers, on the sidelines of an IEF meeting, Opec members have come to an agreement that they will keep to an production quota of 32.5 – 33mn b/d.
No real deals at present have been made: Opec has only agreed to come to an agreement in November, leaving room for a change of mind.
Iran had repeated its refusal to cut output or agree to a fixed quota until its own production had reached pre-sanctions production levels. At same time Saudi Arabia was also putting its foot down, requesting full support of the Opec members, including Iran.
Somewhere behind closed doors, diplomats were working on a deal in which both Saudi Arabia and Iran could be partners.
If adhered to strictly, this will push oil prices up, and hence make LNG…
Full article available in Natural Gas World Magazine Issue 4.