The member Organisation of exporting countries oil (OPEC) reached on Wednesday 28 September in Algiers an agreement “historic” to limit production. The Secretary of State for Nigerian oil, Emmanuel Ibe Kachikwu, spoke capped at a level of “32.5 to 33 million barrels per day” following a meeting informal. Current production is estimated at 33.2 million barrels per day.
The Qatari Minister of Energy, Mohammed Saleh Al-Sada, who presided meeting confirmed this figure. “It was a very long meeting in Algiers, but historical” has he said adding that the level of reduction per country will be defined by the top of the cartel in Vienna on 30 November.
He stressed that the meeting took place in an atmosphere “very positive reflecting the strong coherence of OPEC” to support price of black gold in free fall for two years.
For his part, the Algerian Energy Minister Noureddine Boutarfaa explained that this unexpected decision on a decrease in production was “unanimous and unqualified” . The day before, the Saudi Arabia and Iran the two major regional rivals in the Middle East, had yet displayed divisions .
The Russia the second largest exporter after Saudi Arabia, is present in Algiers but had said it would announce its position after the meeting of the fourteen members of OPEC.
The news immediately made climb crude prices, which closed sharply higher in New York, while markets were expecting instead that the meeting will lead to a statement of disagreement . The price of a barrel of benchmark (WTI) in the United States won 2.38 dollars to 47.05 dollars on the contract for November delivery. In London, the price of a barrel of Brent North Sea crude for delivery in same maturity also increased, from 2.72 dollars to 48.69 dollars.
However, analysts say, such an agreement does not change the fundamentals of the market, weighed down since mid-2014 by an oversupply of fruit boom of US shale oil and OPEC’s strategy to open bottom valves for maintain market share.
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