Oil prices on shaky ground amid global financial market worries

Secretary Rick Perry during a visit to Budapest

Secretary Rick Perry during a visit to Budapest

They discussed the "state of the oil market" and energy cooperation between the two countries during a meeting in eastern Dhahran city, the minister, Khalid Al-Falih, said on Twitter. "Today's decision is a very important step for the oil producers, the oil market and the future of the oil industry", he said.

The cartel said that it forecasts oil supplies of non-OPEC countries to sell by as much as 2.16 million barrels a day in 2019, with output driven primarily by the US, Russia, Brazil and the United Kingdom, according to its latest monthly report.

Iran maybe exporting around 1 million barrels per day now and any reduction may tighten the oil markets, especially around seasonally strong demand during summers.

On the Heels of Its OPEC Exit, Will Qatar Increase Its Oil Output? Thus, if the daily oil production in October was 783,000 barrels, from next year Azerbaijan will maintain this figure at 763,000. "On top of this, Saudi Arabia also needs higher oil revenues to fund domestic Saudi spending".

The government of Alberta province in Canada has also ordered a mandatory cut in production of crude oil and bitumen in their province by 0.325 million barrels per day starting from January 2019.

OPEC's third largest producer Iran, however, will be exempt from the deal due to US sanctions on its crude exports, joining Libya and Venezuela, which will also be excluded from the oil cut agreement. Its oil production level of 11.4 million barrels per day will be reduced by about 2 percent, to 228 thousand barrels. Low-sulfur crude oil is often processed into gasoline and is in high demand, particularly in industrialized countries. This would hurt crude oil demand and contribute to views that the market is oversupplied, traders have said.

OPEC will cut 800,000 barrels per day for six months starting January.

The rise came after crude prices dropped by 3 per cent the session before amid ongoing weakness in global stock markets and concerns that slowing oil demand-growth could erode supply cuts announced last week by the Organisation of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers including Russian Federation.

Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.

The production cut will tighten the oil market by the third quarter of 2019, and boost Brent prices back to more than $70 per barrel.

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