WED, JULY 26 2017-theG&BJournal–The price of OPEC basket of fourteen crudes stood at $47.11 a barrel on Tuesday, compared with $46.01 the previous day, according to OPEC Secretariat calculations, a rally which surprised my market watchers.
But it was on the card once some major OPEC members began promising cuts. Nigeria, suffering from production lapses due to infringements in the Niger Delta voted to keep production at 1.8 million amid industry analysts doubt the country has reached that level in output.
Saudi Arabia has promised to cut August exports to 6.6 million barrels a day, one million less than a year earlier. United Arab Emirate also announced a 10% export cut for September.
Production limit promises arose from a meeting on Monday described as crucial in Russia where both OPEC and non-OPEC members appeared to have reached an unprecedented agreement on how to manage oil price.
The Saudi energy minister Khalid al-Falih confirmed this development Monday following optimism expressed by Nigeria’s Mohammad Barkindo, OPEC Secretary-General. Barkindo said he expects the re-balancing of oil-market supply and demand to accelerate in the second half of this year against the backdrop of cuts and promises of export cuts
The continued decline in US crude inventories also boasted the market Tuesday. Prices shot to $48 in electronic trading after the American Petroleum Institute, a trade group, reported a 10.2 million barrel drop in last week’s U.S crude stockpiles.