OPEC likely to cut output between 1 million and 1.5 million barrels

OPEC is likely to decide to cut the oil production between 1 million and 1.5 million barrels in its upcoming December meeting, Johannes Benigni, chairman and founder of consultancy JBC Energy Group, believes.

“Oil production cut is expected when OPEC meets in Vienna next week amid worries over a US-China trade war, a supply glut and demand slowdown,” he told CNBC.

Benigni pointed out that OPEC will probably manage to stabilize the oil market by choosing the right language. “They will indicate a cut of between 1 million and 1.5 million, and that will do, the market probably will stabilize.”

The expectation or the hope for OPEC right now would be that prices go lower, and demand may come back, he added.

“The question would be, is Russia ready to cut at $60?” Benigni said.

OPEC leaders will gather in Vienna on Dec. 6 to discuss how to manage the oil output, supply glut and demand slowdown.

For the first time ever, in 2016, the Member Countries of OPEC coordinated with 11 non-OPEC oil producing countries in a concerted effort to accelerate the stabilization of the global oil market through voluntary production adjustments, which amounted to approximately 1.8 million barrels per day.

The Declaration was an outcome of the Joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting held on 10 December 2016 and was effective for an initial period of six months. The Second Joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on 25 May 2017, decided to extend the voluntary production adjustments for another nine months commencing 1 July 2017. At the third joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on 30 November 2017, it was agreed to amend the Declaration of Cooperation so that it will take effect for the entirety of 2018.

Source: Trend