OPEC announced this evening that its 14 member states would contain output at 32.5-33.0m barrels a day (b/d) and set production limits for OPEC producers.
The production limit appears to represent a concession by Saudi Arabia which had previously said it would only cut output if Iran froze production.
“The Conference took into account current market conditions and immediate prospects and concluded that it is not advisable to ignore the potential risk that the present stock overhang may continue to weigh negatively well into the future, with a worsening impact on producers, consumers and the industry,” OPEC said following the end of a meeting of its member states in Algiers. “…OPEC Member Countries have decided to conduct a serious and constructive dialogue with non-member producing countries, with the objective to stabilize the oil market and avoid the adverse impacts in the short- and medium-term.”
OPEC said world oil demand was buoyant andthat there signs non-OPEC output was declining.
“The Conference opted for an OPEC-14 production target ranging between 32.5 and 33.0 mb/d, in order to accelerate the ongoing drawdown of the stock overhang and bring the rebalancing forward,” the statement said.
It said a High Level Committee comprising OPEC members “would recommend the implementation of the production level of the member countries.”
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