Today, the Organization of the Petroleum Exporting Countries (OPEC) agreed to cut its oil output for the first time since 2008. A decision that surprised the oil market as many were doubting that OPEC’s members could agree to limit their oil output. OPEC members including Saudi Arabia agreed to limit their oil output to help the oil market recover.
Brent Crude Oil Price
Brent and WTI spiked by nearly 8 percent on the news that cartel will finally limit its oil output after a long year of discussion which mostly failed to bring OPEC members together to cut their oil output. At the time of writing this update, Brent Crude and WTI were $51/bbl and $49/bbl respectively.
In its meeting today, OPEC agreed to reduce its oil output by around 4.5 percent, or about 1.2 million barrels per day. Around 0.5 million barrels per day of this production cut would be contributed by Saudi Arabia by cutting its oil output to 10.06 million bbl/day. Iran on the other hand would limit its oil output at close to current levels of 3.797 million barrels per day. The rest of output cut would be contributed by the other members. Following this news, oil prices are expected to continue its upward movement and could touch $55/bbl by the end of this week.
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