Baku, Azerbaijan, Dec. 13
By Leman Zeynalova – Trend:
Inclusion of non-OPEC countries in the oil output deal is bolstering market sentiment and will help support prices in December, Emma Richards, oil and gas analyst with BMI Research, told Trend Dec. 13.
During the Vienna meeting held Nov. 30, OPEC members decided to implement a new OPEC-14 production target of 32.5 million barrels per day.
Non-OPEC countries agreed to cut the oil output by 558,000 barrels per day during the meeting held Dec. 10. Eleven non-OPEC countries – Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan and South Sudan – agreed to reduce the oil output.
Richards says that a lot of the proposed non-OPEC cuts are either natural declines or, as in the case of Russia, will be made only gradually.
“So, from a fundamental perspective, the impact is less significant than the headline figure would suggest,” said Richards, adding that 558,000 barrels per day will likely be an end-of-period target, rather than an average reduction over the six months and there is a definite risk that the target will be missed.
Nevertheless, the expert believes that assuming a decent level of compliance, the prices could easily be supported above $60 per barrel.