Petroleum Exporting Countries reached an agreement in Algeria for reducing oil production to a level between 32.5 and 33 million barrels a day.
Qatari Energy Minister Mohammed Bin Saleh & Nigerian Minister of State for Petroleum Emmanuel Ebi Katcheko confirmed to reporters at the conclusion of the informal meeting of OPEC in Algeria, “We have reached an agreement to cut production to between 32.5 and 33 million barrels a day.”
Algerian Energy Minister Noureddine Bouterfa said: “The informal meeting turned into an official meeting and ended with a historic agreement”.
Oil prices rose 6% after the disclosure of the agreement that will be announced during the next meeting of the organization in November. International benchmark Brent crude rose to $ 2.72 or 5.9% to settle at 48.69 dollars a barrel, after reaching its highest level in more than two weeks at $ 48.96 a barrel.
WTI US rose 2.83 or 5.3% to settle at 47.05 dollars a barrel, after its highest level since the eighth of September record at $ 47.45 a barrel.
Oil prices rose with the data indicating a sudden drop in US crude stocks, although the atmosphere of concern about the lack of agreement among producers to cut back production limited the gains. International benchmark Brent crude rose 21 cents to $ 46.18 a barrel as US crude West Texas Intermediate rose 25 cents to $ 44.92 a barrel.
Oil futures fell today with the market growing doubts in the way the application of OPEC plan to cut crude output. The historic agreement between the members of the organization since 8 years pushed oil prices on Wednesday night to go up by 6%.
The reasons for market doubt:
1. Russia didn’t announce its confirmation on the agreement.
2. Postponing all the details till November
Goldman Sachs” predicted that OPEC’s agreement will add 7 to $ 10 for oil prices in the first half of next year.