At its recent biannual meeting, in Vienna last week, global oil-producer, OPEC, reported they are considering slowing production by 500,000 barrels per day.
The twice-yearly meeting of the 14-member cartel concluded late on Thursday, almost ending the session with no clear deal. Fortunately, Iran’s oil minister mentioned that the cartel had reached a decision, even though they would not comment on the progress; at least, according to a report from Dow Jones.
Earlier in the day, OPEC had noted they still had a handful of issues that needed resolving. But then, almost to the end of the day, OPEC announced it would cancel its customary press conference that typically follows these meetings.
The 500,000- barrels they are reportedly cutting is much bigger than the numbers leaked out to the public ahead of the meeting. The new number would bring the total production cut to 1.7 million barrels per day. On Friday OPEC+ (the super-pac notation for OPEC and all of its allies, which includes Russia) met to finalize their measure proposals. This includes any cuts and how much of this cut would be shouldered by each of the countries involved.
In after hours trading, international oil benchmark Brent crude jumped 21 cents per barrel, to trade at $63.21. Brent had briefly touched on $40. On the other hand, benchmark US West Texas Intermediate took at 10 cent dip to $58.33.
The cut is certainly deeper than they had expected but it may not have too much of an impact on oil prices; at least, not what we will see. Ahead of Thursday’s meeting, OPEC+ was not pumping as much oil as had been allotted, as a whole. Accordingly, Saudi Arabia—who has been consistently producing less than allowed—continues to demand that all other producers who are currently overproducing should comply with the quota.