OPEC Cut Was Not Easy
The move to cut 1.2 million barrels per day from the market was not easy, Suhail Mohamed Al Mazrouei, UAE minister of energy and industry and president of the OPEC conference, has revealed in a television interview with Bloomberg.
“I think this is first of all a very responsive move from both OPEC and non-OPEC. It was not easy because of the dynamics since the summer,” Mazrouei said in the interview.
“The market have asked us to take action and increase production a few months ago and we did. So to come and convince all of those countries that you need to reverse that and go and remove production again was not easy but I think the trust on the organization, the trust of the technical team, on their analysis, have led us to become responsive,” he added.
The production cuts are effective as of January 2019 for an initial period of six months. The contributions from OPEC and non-OPEC will correspond to 800,000 barrels per day and 400,000 barrels per day, respectively.
The next OPEC and non-OPEC ministerial meeting is scheduled to convene in Vienna, Austria, in April next year.
On December 7, an industry note from Jefferies warned “if no [cut] agreement is reached, oil prices have significant downside”.
On December 6, Bjornar Tonhaugen, head of oil market research at Rystad Energy, said in a statement posted on the company’s website, “should OPEC+ decide this week not to cut production substantially, the market can probably wave goodbye to any hopes of short-term recovery in prices”.
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