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| Oil continues rally as Russia joins OPEC production cut | |
| (about 1 hour later) | |
| Crude oil prices extended gains on Thursday on news the Organization of the Petroleum Exporting Countries (OPEC) signed its first coordinated production cut in eight years and the biggest non-member producer Russia agreed to join. | Crude oil prices extended gains on Thursday on news the Organization of the Petroleum Exporting Countries (OPEC) signed its first coordinated production cut in eight years and the biggest non-member producer Russia agreed to join. |
| While OPEC pledged to slash its output by 1.2 million barrels per day (bpd) to 32.5 million, the deal also envisages a 600,000 bpd cut from producers outside the cartel, and Russia will contribute to half of it. | While OPEC pledged to slash its output by 1.2 million barrels per day (bpd) to 32.5 million, the deal also envisages a 600,000 bpd cut from producers outside the cartel, and Russia will contribute to half of it. |
| "This is a very important step for the global oil industry, aimed at restoring a healthy balance of supply and demand. It will keep the industry attractive for investments in the long term,” said Russian Energy Minister Aleksandr Novak. | "This is a very important step for the global oil industry, aimed at restoring a healthy balance of supply and demand. It will keep the industry attractive for investments in the long term,” said Russian Energy Minister Aleksandr Novak. |
| "We are optimistic about the agreement reached today and believe it to be a historically important event," said the Russian minister. | "We are optimistic about the agreement reached today and believe it to be a historically important event," said the Russian minister. |
| Oil prices were rising all day ahead of the November 30 announcement and continued to rally on Thursday, gaining over nine percent in two days. | Oil prices were rising all day ahead of the November 30 announcement and continued to rally on Thursday, gaining over nine percent in two days. |
| Brent crude was trading at above $52 per barrel, while US West Texas Intermediate was seen around $50 per barrel. | Brent crude was trading at above $52 per barrel, while US West Texas Intermediate was seen around $50 per barrel. |
| “OPEC has delivered an agreement. Bulls got as much as could be hoped for...For the time being, oil prices have received a huge support," said Jason Gammel of US investment bank Jefferies, as quoted by Reuters. | “OPEC has delivered an agreement. Bulls got as much as could be hoped for...For the time being, oil prices have received a huge support," said Jason Gammel of US investment bank Jefferies, as quoted by Reuters. |
| Barclays has expressed skepticism, as the agreement only caps production, not exports. | Barclays has expressed skepticism, as the agreement only caps production, not exports. |
| "The outcome is consistent with... what OPEC production levels were expected to be in 2017 irrespective of the deal reached," said the British bank. | "The outcome is consistent with... what OPEC production levels were expected to be in 2017 irrespective of the deal reached," said the British bank. |
| "We do not believe that oil prices can sustainably remain above $55 per barrel, with global production responding first and foremost in the US," said Goldman Sachs. | "We do not believe that oil prices can sustainably remain above $55 per barrel, with global production responding first and foremost in the US," said Goldman Sachs. |
| Production in the US has grown by more than three percent this year, reaching a daily output of 8.7 million barrels. | Production in the US has grown by more than three percent this year, reaching a daily output of 8.7 million barrels. |