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Oil prices down after OPEC+ meeting

Other News Materials 25 September 2017 15:53 (UTC +04:00)
World oil prices declined on September 25 against the backdrop of the OPEC + meeting
Oil prices down after OPEC+ meeting

World oil prices declined on September 25 against the backdrop of the OPEC + meeting, Azernews reported.

Brent crude futures were at $52.85 per barrel, down 0.04 percent, while U.S. West Texas Intermediate (WTI) futures at $50.59 per barrel down 0.14 percent, according to RIA Novosti.

The OPEC and non-OPEC Joint Ministerial Monitoring Committee concluded its next meeting with little fanfare, but noted the alliance had reached its highest ever level of compliance in August at just over 115 percent. The oil nations also considered the possibility of extending production cuts that expire in March 2018 by an additional three to six months to allow more time for markets to rebalance.

Russian Energy Minister Alexander Novak, however, said it was too early to make any decisions on an extension.

Addressing the meeting, Kuwait's oil minister Essam Al-Marzouk said: "There is no doubt that the market is moving towards balancing."

He went on to say that for 8 months from the beginning of the OPEC agreement, the level of the transaction was 99 percent, adding that there is also the potential for reducing and implementing agreements by 100 percent.

The next JMMC meeting is scheduled for the day prior to the full ministerial meeting on November 30 in Vienna.

The International Energy Agency (IEA) reported that in August OPEC production by 170,000 barrels per day exceeded the target level of 32.5 million barrels.

Iran called for limiting oil production in Libya and Nigeria within the OPEC + deal.

Iranian Oil Minister Bijan Namdar Zangeneh stressed that it is the increase in production in these two countries that results in incomplete implementation of the OPEC + agreement.

For all three countries -Iran, Libya and Nigeria, despite the fact that they are members of OPEC, was made an exception within the deal of the production limitation agreement.

However, for Iran the quota was still established: the country can increase production by no more than 90,000 barrels per day.

Libya and Nigeria have promised to freeze or even slightly reduce production after reaching a certain level of production.

Libya and Nigeria are exempted from obligations, as the oil industry of these countries has suffered greatly from the activities of armed groups.

To some extent, the weakness of the dollar and Baker Hughes' data on drilling activity in the U.S. exert some support to the market: the number of oil installations in operation declined by 5 units to 744.

Moreover, the market eyes the referendum on the independence of Kurdistan, which is scheduled for September 25. The authorities of the region announced the possibility of additional benefits for foreign oil companies developing its fields.

OPEC and other major oil producers such as Russia, Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Sudan, and South Sudan reached an agreement in December 2016 to remove 1.8 million barrels a day from the market.

OPEC and its partners decided to extend its production cuts till March 2018 in Vienna on May 25, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.

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