OPEC and non-OPEC members agreed Friday in Vienna to work to jointly reduce crude oil production by 1.2 million barrels per day for the next six months to try to influence higher oil prices.
“In view of a growing imbalance between global oil supply and demand in 2019, [we] hereby decided to adjust the overall production by 1.2 million barrels per day, effective as of January 2019 for an initial period of six months,” OPEC said Friday.
The Organization of Petroleum Exporting Countries, which starting in January will have 14 members after Qatar pulls out, will be responsible for reducing 0.8 million barrels per day. Participating non-OPEC members, of which Russia is the biggest producer, will reduce 0.4 million barrels, it added.
Saudi Arabia and Russia are two of the world’s three biggest producers. The United States, the world’s biggest crude oil producer, did not participate in the talks.
OPEC and non-OPEC countries “will remove 1.2 million barrels per day from the market. While this had been the general consensus among analysts heading into the meeting, given the dampened expectations for a deal to be reached at all on Thursday, this had come as a slight surprise by the market,” Daily FX analyst Justin McQueen told UPI.
“Focus will now be on United States President Donald Trump’s response to the actions taken by OPEC and Non-OPEC members,” he added. Trump said in recent weeks he wanted lower prices. The U.S. is increasing crude oil production and earlier this year became the world’s biggest producer but it also imports large volumes of crude oil.
The next “OPEC and non-OPEC Ministerial Meeting will convene in Vienna, Austria, in April 2019,” OPEC said.
The joint move between OPEC and non-OPEC nations came after Brent crude oil future prices had plunged from $86 per barrel on October 3 to under $60 per barrel a week ago amid concern the oil market was oversupplied.
Brent front-month crude oil prices increased 5 percent to $63.03 per barrel as of 1:15 p.m. while West Texas Intermediate prices gained 4.5 percent to $53.83 per barrel as of the same time.
OPEC was founded in 1960 by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The other current members that are expected to meet in April are Libya, the United Arab Emirates, Algeria, Nigeria, Ecuador, Angola, Gabon, Equatorial Guinea and Congo.