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Oil prices ease on doubts about Opec production cuts | |
(about 1 hour later) | |
The price of oil slipped back in Thursday trading as traders questioned whether the output cut agreed by Opec would be binding. | The price of oil slipped back in Thursday trading as traders questioned whether the output cut agreed by Opec would be binding. |
Prices had jumped by 6% on Wednesday's news that Opec had voted for the first production cut in eight years. | Prices had jumped by 6% on Wednesday's news that Opec had voted for the first production cut in eight years. |
Oil ministers said full details of the agreement would be finalised at a formal Opec meeting in November. | Oil ministers said full details of the agreement would be finalised at a formal Opec meeting in November. |
The absence of detail prompted some to have second thoughts about whether the cartel would take actual firm action. | The absence of detail prompted some to have second thoughts about whether the cartel would take actual firm action. |
Michael McCarthy, chief market strategist at CMC Markets, said: "Investors and traders are sceptical - with good reason. More cynical traders are questioning the complete lack of detail, including the potentially problematic question of which nations will curtail production." | |
Brent crude was down 0.8% at $48.28 a barrel in late morning trade after hitting $49.09 on Wednesday. | |
Opec pledged to limit production by about 700,000 barrels a day, although the cuts will not be distributed evenly across the cartel, with Iran being allowed to increase production. | Opec pledged to limit production by about 700,000 barrels a day, although the cuts will not be distributed evenly across the cartel, with Iran being allowed to increase production. |
The outline deal will limit output from Opec countries to between 32.5 million and 33 million barrels a day, said Mohammed Bin Saleh al-Sada, Qatar's energy minister and current president of Opec. | The outline deal will limit output from Opec countries to between 32.5 million and 33 million barrels a day, said Mohammed Bin Saleh al-Sada, Qatar's energy minister and current president of Opec. |
Disagreements between Iran and its regional rival, Saudi Arabia, had thwarted earlier attempts to reach a deal. | Disagreements between Iran and its regional rival, Saudi Arabia, had thwarted earlier attempts to reach a deal. |
Many of Opec's smaller members pushed for the cut after seeing oil prices plunge from $110 a barrel over the past two years because of oversupply and slowing demand. | Many of Opec's smaller members pushed for the cut after seeing oil prices plunge from $110 a barrel over the past two years because of oversupply and slowing demand. |