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Bullish global outlook prompts OPEC+ compromise deal to avoid price war
LONDON: Brent crude oil futures neared $50 on Friday after producers reached a compromise deal to nudge output from next month.
The Organization of the Petroleum Exporting Countries (OPEC) and their allies, known collectively as OPEC+ on Thursday agreed to soften output cuts from January by 500,000 barrels per day to be followed by further increases that have not yet been agreed each month.
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It means that OPEC+ has committed to cut production by about 7.2 million barrels per day (bpd) from January compared with the existing cuts of 7.7 million bpd. The agreed reduction represents about 7 percent of global oil demand.
“This week’s compromise reflects a determination to avoid a repeat of the price war in March and April this year,” said Wood Mackenzie Vice President Ann-Louise Hittle.
The consultancy expects Brent to average at least $45 next month as a result of the agreement.
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