Oil Price Fundamental Weekly Forecast - Production Cut Agreement Should Be Supportive

OPEC decisions aren't shaped by Twitter: Russia

But OPEC was forced to curb output in 2016 as oil-producing nations faced budget shortfalls, and as prices recovered, shale's output accelerated. Another source said Tehran wanted an OPEC communique to specify that Iran was exempt from cuts. Mr. Trump has backed Saudi Crown Prince Mohammed bin Salman despite calls from many US politicians to impose stiff sanctions on the kingdom.

Asked about pressure from Trump, Al-Falih said that oil companies in the United States would appreciate the group's efforts.

Venezuela, Iran and Libya - countries where the industry has already been disrupted by USA sanctions or unrest - are exempt from the plans. Yet he said Russian Federation would cut its production gradually given the harsh winter conditions.

In the earlier conversation, OPEC and its allies had proposed a reduction of 10 million barrels per day in oil production, in which 6.50 lakh OPECs were to be reduced.

The Russian Energy Minister, Alexander Novak, was quoted by Reuters as saying the decision to cut output was hard one for his country in view of the winter and the cold weather at Russian oil fields. Russian Federation is going to be responsible for cutting about 228,000 to 230,000 bpd.

USA output rose to 9.7 million bpd in mid-2015, just shy of the nation's all-time high set in 1970, but fell off when OPEC flooded the world markets with supply to try to hinder the shale industry.

Iran, Libya and Venezuela were effectively given exemptions. Hence, he agreed to be a part of the overall output cut arrangement.

"It's mainly due to the lowered expectations before the deal".

"The commitments made under this proactive collaboration between participating countries are to be voluntarily implemented, non-binding and would not in any way affect the rights of peoples and nations to permanent sovereignty over the exploitation and management of their natural resources", he said. Not coincidentally, OPEC and its allies agreed to meet again in April to review this week's deal - several months earlier than usual.

More news: China increases pressure on US, Canada over Huawei executive's arrest

"We don't know what will Iran's sanctions picture look like".

“Now we have a situation where supply will come off the market, ” Badiali said.

Oil prices between $55 to $65 per barrel are a "sweet spot for the US producer and the USA consumer", said Rob Thummel, portfolio manager at energy investment manager Tortoise Capital. Yet, it's a paper tiger achievement: In reality, the US remains exposed to global energy prices, still affected by the old geopolitics of the Middle East.

Saudi Arabia's Oil Minister Khalid Al-Falih talks to journalists at the beginning of an OPEC meeting in Vienna.

The meeting was so diplomatically explosive that the Saudi Energy Ministry, at first, denied it happened.

On paper, the shift to net oil exports means that the U.S.is today energy independent, achieving a rhetorical aspiration for generations of American politicians, from Jimmy Carter to George W. Bush.

Meanwhile, Saudi Arabia has been under pressure from the U.S to maintain status quo with respect to production, given the latter's stance that current weakness in oil price is justified.

Russia, Saudi Arabia and the United States have been vying for the position of top crude producer in recent years.

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