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After oil turbulence, something to cheer
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OPEC (Bloomberg/File photo)
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fter a turbulent eight weeks, during which crude oil lost nearly 30 percent of its value, a last minute deal between countries of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC countries to cut production is expected to lend some stability to the market.
The output cut may not have come to the liking of Asian importers, who have been enjoying sharply lower prices in recent weeks. But a decision by OPEC and its allies led by Russia earlier this month in Vienna to implement 1.2 million barrels per day production cuts has at least for the time being stabilized the price outlook amid expectations that the reduction would prevent a surplus from building in the early part of 2019.
According to S&P Global Platts Analytics, the cuts would help to bring stability to crude prices above US$60/b. It expects Brent to hover in the $60-65/b range through the early months of 2019.
With crude having crashed from as high as $86/b in early October to below $58/b a barrel in late November, OPEC and non-OPEC leaders walked into the Dec. 6-7 meeting not free of challenges.
