Although OPEC discussed on a range between one million and 1.3 million barrels per day, a consensus had to wait pending a commitment by the non-OPEC allies, led by Russian Federation, on the issue.
OPEC's president says the oil cartel in conjunction with non-OPEC producers including Russian Federation have agreed to cut oil production by 1.2 million barrels a day in January for six months. World Oil production is just over 100 million barrels per day, so this is a 1.2% global cut.
Against this backdrop, West Texas Intermediate crude for January delivery CLF9, +1.24% rose $1.12, or 2.2%, to settle at $52.61 a barrel on the New York Mercantile Exchange.
Speaking to reporters here on the sidelines of the Indian Sugar Mills Association (ISMA) AGM, Petroleum Minister Dharmendra Pradhan drew attention to the Saudi Petroleum Minister Khalid Al Falih's observations on Thursday at the OPEC meeting in Vienna, about Prime Minister Narendra Modi's views in this regard.
After stressing that his country opposes reducing its oil production due to United States sanctions, Iranian Oil Minister Bijan Namdar Zanganeh complained that it was the first time a U.S. president was trying to tell OPEC what to do. Riyadh and Abu Dhabi, partly supported by Moscow, were expected to fill in the gaps caused by the US sanctions on Iran.
Analysts noted a big cut would be needed to reverse recent price falls and Russia's volume was key to this.
Four OPEC and non-OPEC sources claimed Iran, which came under fresh U.S. sanctions in November, was also holding up a final deal.
KAZINFORM Minister of Energy of Kazakhstan Kanat Bozumbayev participated in the 5th OPEC+ Ministerial Meeting in Vienna.
USA light crude was trading up 4% at $53 a barrel on Friday afternoon while Brent was 5% higher at $63.
In an October blog post, we cautioned that oil had run ahead of fundamentals and that a release of waivers for Iran oil consumers could cause prices to retrace back to the mid-$70s - effectively erasing some of the geopolitical risk premium that had entered the market. Zero", he said. "One hundred percent of the revenue that Iran receives from the sale of crude oil will be held in foreign accounts and can be used by Iran only for humanitarian trade or bilateral trade in non-sanctioned goods and services. He sent a signal to the market that it was his goal to reduce oil exports from the rouge state to "zero" by November.
OPEC said its decision to cut followed reviews of various reports, including those of its Secretary-General, the Joint Ministerial Monitoring Committee (JMMC), the Joint Technical Committee (JTC), the OPEC Secretariat, and the Economic Commission Board.
US crude CLc1 rose $1.10 to $52.59 a barrel, after earlier reaching a session high of $54.22.