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AKIPRESS.COM - Moving to prop up prices, OPEC and its oil-producing allies agreed on Friday to cut production by 1.2 million barrels a day despite pressure from President Trump to maintain current output levels and keep prices low, New York Times reports.
Saudi Arabia, OPEC’s de facto leader, will make the biggest cut. Russia, which is not an OPEC member but is an increasingly important factor in global oil markets, will account for much of the rest.
The agreement on cuts, which were deeper than expected, capped two days of meetings focused on a growing oil glut that had caused prices to drop by roughly a third since early October.
“This meeting is an important test not only for OPEC’s ability to function effectively, but especially of the new cooperation between Saudi Arabia and Russia,” said Jason Bordoff, director of Columbia University’s Center on Global Energy Policy, who was in Vienna to monitor the sessions.
Oil prices rose sharply after the news emerged, then eased. Brent crude, the international benchmark, and West Texas intermediate crude, the American standard, both ended the day up about 2 percent.
Analysts said the output cuts seemed likely to achieve their purpose. “This is a very important step to stabilize the markets,” said Roger Diwan, a vice president for strategy at the research firm IHS Markit. “This is a big cut.”