Oil prices recover as Opec and allies agree to cut output

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Rebuffing Wednesday's tweets by Trump, Novak said the group's members make decisions based on the market situation, the balance between oil supply and demand and available reserves.

Although OPEC discussed on a range between one million and 1.3 million barrels per day, a consensus had to wait pending a commitment by the non-OPEC allies, led by Russian Federation, on the issue.

The Organisation of Petroleum Exporting Countries (OPEC) and other major oil producers yesterday agreed to cut about 1.2 million barrels of oil to address falling oil price, which is now facing a record low of $63 a barrel.

According to her, production cut of 1.2 million b/d would tighten the oil market by the third quarter of 2019 and cause prices to rise back above $70 per barrel for Brent.

The high-stakes meeting, coming just as the U.S. Congress is ratcheting up pressure on Riyadh over its role in the murder of a Washington Post columnist and in the war in Yemen, is also Saudi Arabia's latest effort to come to grips with a double-barreled new reality.

With pressure from Trump, Riyadh could propose OPEC+ lower production by 1 mbpd not to aggravate the US president.

"The complicated issues facing OPEC delayed the agreement, in what seemed like a replay of the delicate talks that led to the first OPEC/non-OPEC production cut agreement in December 2016".

Emirati Energy Minister Suhail Mohamed al-Mazrouei, speaking at the start of the meeting at OPEC headquarters in Vienna, said that the organisation's member countries had a "final draft" to discuss with non-members, indicating that members had made progress since a meeting on Thursday broke up without agreement.

One of the OPEC sources said: "Iran will insist on an exemption until sanctions are removed".

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Analysts noted a big cut would be needed to reverse recent price falls and Russia's volume was key to this.

Trump was claiming to cut Iranian oil exports to zero and his best buddy bin Salman was Trump's main chess piece to succeed in his game against Iran.

U.S. light crude was trading up 4% at $53 a barrel on Friday afternoon while Brent was 5% higher at $63.

"I think this is a strong signal to anybody who has doubted it that our cooperation is continuing and we can react to any challenge the market throws at us", he said in Russian through a translator. In early trading, the global benchmark had dropped below $60 when it looked as if oil exporters might leave output targets unchanged.

This shift went on display this week at OPEC's meeting in Vienna.

Production from the USA has also surprised on the upside, with the United States becoming a net exporter of crude and products for the first time in seven decades.

On the demand side, the trade dispute between USA and China threatens global economic growth and could lead to lower demand in 2019.

Both Cardinal Energy Ltd. and Granite Oil Corp. said they can't afford to wait and see if Alberta's production cuts will result in a sustained recovery in oil prices.

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