Non-OPEC oil producers to cut output 558,000 barrels a day

KIYOKO METZLER, Associated Press
PHILIPP-MORITZ JENNE, Associated Press

 

VIENNA (AP) — OPEC has persuaded 11 non-members to cut oil production, a move aimed at draining a worldwide oil glut and boosting low prices that have squeezed government finances in Russia and Saudi Arabia.

 

Officials said Saturday that non-members agreed to cut 558,000 barrels per day for six months starting Jan. 1, and that the deal was renewable for another six months after that. The figure was less than the 600,000 barrels a day that OPEC had hoped for.

 

Those non-member cuts come on top of an OPEC decision Nov. 30 to reduce member output by 1.2 million barrels a day.

 

Saudi oil minister Khalid Al-Falih called Saturday's deal "historic" and said it would stabilize the market through next year and encourage industry investment. The announcement came after OPEC member states met with Russia and other non-OPEC countries in Vienna for talks.

 

Al-Falih said the deal "is meant to accelerate the natural process of rebalancing" the oilmarket.

 

The 11 non-OPEC countries taking part in the agreement are: Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan and South Sudan.

 

OPEC Secretary General Mohammed Barkindo said much of the production cuts were expected to come from Russia, which co-chaired Saturday's meeting.

 

Major oil producers such as non-member Russia and cartel leader Saudi Arabia have seen a worldwide oversupply send prices lower and reduce revenues to government budgets.

 

It remains to be seen whether the cutbacks will do much to raise prices, given OPEC members' track record of exceeding agreed-upon production quotas, and due to weak uptake from a sluggish global economy.

 

Some non-OPEC countries such as Mexico were already seeing production wane due to weak demand. Al-Falih said "the intent by all those who participated is to contribute to drawing down oil inventories that are excessive."

 

"And whether the reduction in that over-supply comes from deliberate intervention — like it is the case in Saudi Arabia — or by simply managing the decline in a way that makes them meet this agreement is left to the countries themselves," he said.

 

Oil fell from over $90 per barrel in early 2014 to as low as $40 earlier this year, briefly sending the average price of regular gasoline at the pump to under $2 for motorists in the United States. Oil closed at $51.58 on Friday, up 6 percent since the OPEC production cut was announced.

 

 

-- © Associated Press 2016-12-11

The morning coffee suddenly taste a lot better.  

A lesser supply means higher prices for less ! Great Move for the greedy More $$$s for less oil bigger profits 

Trump will love that. It will convince Americans to support his move for more frakking, and hopefully countries like Saudi will go broke.

More expensive oil means more incentive to invest in other sources such as fracking or renewables such as solar/wind etc.  Any reduction in oil output will only result in a temporary increase in oil prices.  Alas for the oil producing countries peak oil demand is probably nearing or already upon us as alternatives become cheaper and gain more traction. The emergence of electric cars will only further reduce demand for oil. Long term, the price for oil can only go down spelling the end of an era for the greedy OPEC countries and the world will be a better cleaner place for it.

Good news for offshore types :)

4 hours ago, tracker1 said:

A lesser supply means higher prices for less ! Great Move for the greedy More $$$s for less oil bigger profits 

 

What?

When rice price drop to an all time low, everybody offer help and sympathy to farmers, but when the poor oil industry is struggling with $40 oil and laying off hundred of thousand of skilled worked, nobody shred  a tear? Why is that?

2 hours ago, thaibeachlovers said:

Trump will love that. It will convince Americans to support his move for more frakking, and hopefully countries like Saudi will go broke.

 

Frakking? Why not call it Fragging and take it with a bit of Fraggle Rock?

Even fracking is made up word by the media, it is actually called Hydraulic Fracturing and it is good fun. Done about 500 myself.

 

 

43 minutes ago, jaygino said:

More expensive oil means more incentive to invest in other sources such as fracking or renewables such as solar/wind etc.  Any reduction in oil output will only result in a temporary increase in oil prices.  Alas for the oil producing countries peak oil demand is probably nearing or already upon us as alternatives become cheaper and gain more traction. The emergence of electric cars will only further reduce demand for oil. Long term, the price for oil can only go down spelling the end of an era for the greedy OPEC countries and the world will be a better cleaner place for it.

 

First we had Peak Oil in 2007/08, then Plateau Oil and now Peak Demand, which most likely will be just another false prophecy.

Each DAY 200,000 news souls are added to the worlds ever growing population of soon to be 7.5 billion people and we all want more and a better life. It all cost oil.

8 hours ago, rooster59 said:

The figure was less than the 600,000 barrels a day that OPEC had hoped for.

Yes those that shouted the most will cut the least. 

On ‎11‎.‎12‎.‎2016 at 2:16 PM, ExpatOilWorker said:

 

What?

When rice price drop to an all time low, everybody offer help and sympathy to farmers, but when the poor oil industry is struggling with $40 oil and laying off hundred of thousand of skilled worked, nobody shred  a tear? Why is that?

Because when the oil price goes up the pump price goes up, and when the oil price goes down the pump price doesn't go down as far as it should. Just a huge rip off industry.

The oil industry is run by some of the worst people on the planet and they treat people in the countries they get the oil from shamefully. Just look at Nigeria.

The sooner oil is superseded by a better form of energy the better. I hope I can see a certain country go bankrupt and never recover again in my lifetime.

3 hours ago, thaibeachlovers said:

Because when the oil price goes up the pump price goes up, and when the oil price goes down the pump price doesn't go down as far as it should. Just a huge rip off industry.

 

How far down should it go? The price of a barrel affects the marginal cost of your petrol, but the operational costs associated with delivering you the fuel don't vary with the oil price.

4 hours ago, thaibeachlovers said:

The sooner oil is superseded by a better form of energy the better. I hope I can see a certain country go bankrupt and never recover again in my lifetime.

 

Not even in the next 5 lifetimes honestly, and it will probably take about that long for the world to find an actual replacement for it where people don't have to do without. 

Edited December 12, 20169 yr by Strange

4 hours ago, thaibeachlovers said:

Because when the oil price goes up the pump price goes up, and when the oil price goes down the pump price doesn't go down as far as it should. Just a huge rip off industry.

 

The problem is that most of the "easy" oil is already either gone, or the wells are currently producing. The more difficult to get at oil costs more to harvest and thats the real reason prices go up. It costs more per barrel to get it. Then add in everything else. 

 

The prices are always going to rise, always. The cheap fuel is great while it lasts, but its put me out of work for a bit and that sucks, but be prepared, its gonna rise again. 

On 12/11/2016 at 2:38 PM, ExpatOilWorker said:

we all want more and a better life. It all cost oil.

 

That's only because we've been sold the bill of goods that equates consumption of stuff with quality of life.

 

Just one example:  I could drive 50 miles to a Texas beach and have as satisfying a holiday as I could have flying 10,000 miles to Thailand.  Different?  Sure.  But just as satisfying.

Edited December 12, 20169 yr by impulse

more muppet videos pls/

16 hours ago, thaibeachlovers said:

Because when the oil price goes up the pump price goes up, and when the oil price goes down the pump price doesn't go down as far as it should. Just a huge rip off industry.

The oil industry is run by some of the worst people on the planet and they treat people in the countries they get the oil from shamefully. Just look at Nigeria.

The sooner oil is superseded by a better form of energy the better. I hope I can see a certain country go bankrupt and never recover again in my lifetime.

 

What country do you have a beef with? Those pesky salmon eating Tesla driving Norwegians, with there pristine picture perfect fjords?

23 hours ago, impulse said:

 

That's only because we've been sold the bill of goods that equates consumption of stuff with quality of life.

 

Just one example:  I could drive 50 miles to a Texas beach and have as satisfying a holiday as I could have flying 10,000 miles to Thailand.  Different?  Sure.  But just as satisfying.

 

True, if you arrive during spring brake and all the collage girls somehow are wearing drug infused age cancelling glassed that makes guys like you and me look like handsum men, but for unknown reasons the beaches at Pattaya and Phuket can be much more satisfying than the oil infested marshlands of Texas.

42 minutes ago, ExpatOilWorker said:

True, if you arrive during spring brake and all the collage girls somehow are wearing drug infused age cancelling glassed that makes guys like you and me look like handsum men, but for unknown reasons the beaches at Pattaya and Phuket can be much more satisfying than the oil infested marshlands of Texas.

 

Try catching a redfish or an 8' shark on a Pattaya or Phuket beach, in between napping in the bed of your 4x4 right on the beach.  (Okay, I have to drive another 50 miles to get to a beach I can drive and park on).  Then head off to the pistol range and shoot up a brick of .22's and a few clips of 9mm.  And when you're done there, head over for some BBQ beef or deep fried catfish- washed down with real, brewed ice tea (with free refills- none of Thailand's $3.00 for each skimpy glass of sugary tea flavored water from a bottle)

 

Like I said, different, but just as satisfying.  But then, most people I know would rather catch fish than the clap.

Edited December 13, 20169 yr by impulse

On ‎12‎.‎12‎.‎2016 at 6:51 PM, RuamRudy said:

 

How far down should it go? The price of a barrel affects the marginal cost of your petrol, but the operational costs associated with delivering you the fuel don't vary with the oil price.

Exactly. So if oil dropped 50% below the cost it was before, I'd expect the pump price to reflect that, but they don't seem to ever pass on the entire price reduction.

On ‎12‎.‎12‎.‎2016 at 6:58 PM, Strange said:

 

Not even in the next 5 lifetimes honestly, and it will probably take about that long for the world to find an actual replacement for it where people don't have to do without. 

Actually, the world already has the replacement technology, but they won't bring it in for the usual reasons ( follow the money ).

6 hours ago, impulse said:

 

Try catching a redfish or an 8' shark on a Pattaya or Phuket beach, in between napping in the bed of your 4x4 right on the beach.  (Okay, I have to drive another 50 miles to get to a beach I can drive and park on).  Then head off to the pistol range and shoot up a brick of .22's and a few clips of 9mm.  And when you're done there, head over for some BBQ beef or deep fried catfish- washed down with real, brewed ice tea (with free refills- none of Thailand's $3.00 for each skimpy glass of sugary tea flavored water from a bottle)

 

Like I said, different, but just as satisfying.  But then, most people I know would rather catch fish than the clap.

LOL. My chance of catching the clap in my home country is zero. Girls less than half my age just don't want to do it with me, there, and I would never be able to do it with women that look like my granny did before she died of old age.

1 hour ago, thaibeachlovers said:

LOL. My chance of catching the clap in my home country is zero.

 

That's not a bad thing, though.  Is it?

I don't care if it goes up or down at this point. When it went down last Jan. I bought some oil stock. If it goes up I am covered if it stays cheap I drive cheap. One of the VERY few best moves I have ever made. :) 

7 hours ago, thaibeachlovers said:

Exactly. So if oil dropped 50% below the cost it was before, I'd expect the pump price to reflect that, but they don't seem to ever pass on the entire price reduction.

 

But the actual cost of the crude is only part of what you are paying for. The salaries of all those involved in extracting, transporting, refining, distributing the petrol have not reduced. The rents of the petrol stations have stayed the same. The refining costs haven't changed.