At December’s meeting in Vienna, OPEC plus agreed production cuts of 500,000 barrels a day for the first quarter of 2020. This is over and above the production cut of 1.2 million b/d (m b/d) announced a year ago. Furthermore, Saudi Arabia continues to shoulder most of the extra voluntary cuts in output, in an attempt to balance the market and support crude prices. However, in reality both Nigeria and Iraq will continue to produce more than their allotted quota thus reinforcing the Paris based IEA ‘s projection that, even if all OPEC members and Russia were to comply 100 percent, global oil inventories could still rise by 700,000 barrels a day in the first quarter, due to weak demand in the global economy. This would hold prices down.
Impact on oil prices
Benchmark Brent crude was $62 a barrel on Nov. 12 and rose to $65 a barrel after the OPEC meeting announcement. This modest uptick in Brent crude prices demonstrates that oil traders are not very impressed with OPEC’s decision, which in truth; just made official the unofficial extra production cuts they have made for much of the past year. Read more https://www.rigzone.com/news/opec_aims_to_prop_up_oil_prices-31-dec-2019-160681-article/