A mammoth set of Opec+ talks culminated late on 7 December with an agreement to cut, albeit one sparse on details. Efforts to laud the agreement as a triumph of consensus and cooperation do little to hide the fact that the lack of details so far makes it open to cheating. Nevertheless, what is clear is that it will remove sizeable volumes from the table.
The 24 signatories agreed to cut 1.2mn b/d for a six-month period from 1 January 2019. But, whereas the previous round of cuts agreed on in November and December 2016 set clear – if dubiously calculated – baselines for cuts for each country, the latest round lacks such specificity. Opec is to cut 800,000 b/d from its October production (according to the official secondary sources aggregate of 32.90mn b/d). This would imply a collective target of 32.10mn b/d. However, Qatar’s decision to quit Opec from 1 January will bring the new Opec14 target down to 31.49mn b/d. (CONTINUED - 841 WORDS)