Trump and His Gulf Friends Win Big in OPEC Deal

Trump and His Gulf Friends Win Big in OPEC Deal

In the end, the deal appeared to be more of a political compromise, especially when seen in the backdrop of the Iranian Oil Minister Bijan Namdar Zanganeh walking out of a meeting with fellow Opec ministers on Thursday evening, underlining nobody could persuade him to back an increase (in output).

The Organization of the Petroleum Exporting Countries agreed in principle on Friday to raise output enough to match a production target it introduced at the beginning of 2017, but which it has undershot ever since.

Opec's decision to boost oil production from next month clearly testifies the fact that it values market stability and is keen to safeguard the interests of energy consumers who have earlier voiced concerns on rising oil prices.

Press reports say the U.S. government has also been quietly pushing Saudi Arabia and its Opec allies to increase oil production by about 1m bpd.

OPEC's agreement with Russian Federation and other producers to limit oil output has helped to clear a global supply overhang that weighed on prices for years.

Because the group had been producing below that level, that means an increase in production of "a little bit less than 1 million barrels", the Emirati minister said. "We are in for higher prices for longer", he said.

The actual output increases set a bullish tone, as they came in below some of the highest figures that had been discussed prior to the meeting.

World's largest oil consumers - US, China, and India - wanted the rise in supply to bring the cost down.

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"We want to prevent the shortage and the squeeze that we saw in 2007-2008", Falih said, referring to a time when oil rallied close to $150 per barrel.

The group's communique still pledged a return to 100% compliance with the original 2016 agreement - ending a period of deeper-than-intended cuts - but Al-Falih insisted that no individual country will be subject to a strict output cap.

Leading the decliners among tech was open source software provider Red Hat Inc, which tumbled 14.2 percent after its current-quarter and full-year revenue missed analysts' estimates due to a strengthening dollar. Over the past few months, the plan has been overfulfilled, including through declining production in Venezuela and a number of African countries.

Zanganeh has said that if OPEC returned to regular compliance, the group would raise output by around 460,000 bpd.

The performance of the United Arab Emirates' oil minister and OPEC President Suhail Mazrouei was a master class in how to avoid a question.

Yergin said Saudi Arabia and the United Arab Emirates support the current, tougher USA policy toward Iran, Saudi Arabia's rival for influence in the region.

The announcement was made on Saturday during the 4th OPEC and non-OPEC ministerial meeting in Vienna.

He also said OPEC could hold an extraordinary meeting before its next formal talks due on December 3 or adjust deliveries in September, when its monitoring committee meets, if global oil supply fell further because of sanctions on Iran.

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