OPEC and its allies began two days of meetings on Saturday which may culminate in further production cuts of as much as 1 million barrels per day, OPEC+ sources told Reuters, as the organisation faces flagging oil prices and a looming supply glut.

OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, pumps around 40% of the world's crude, meaning its policy decisions can have a major impact on oil prices.

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Three OPEC+ sources told Reuters on Friday that cuts were being discussed among options for Sunday's session, when OPEC+ ministers gather at 2 p.m. (1200 GMT) in Vienna. Before then, OPEC ministers will meet at 11 a.m. on Saturday.

The sources said cuts could amount to 1 million bpd on top of existing cuts of 2 million bpd and voluntary cuts of 1.6 million bpd, announced in a surprise move in April and which took effect in May.

If approved, this would take the total volume of reductions to 4.66 million bpd, or around 4.5% of global demand.

"This number is premature, we didn’t go into these things (yet)," Iraq's oil minister Hayan Abdel-Ghani told reporters on Saturday when asked about a possible cut of 1 million bpd.

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Typically, production cuts take effect the following month after they are agreed, but ministers could also agree a later implementation.

Western nations have accused OPEC of manipulating oil prices and undermining the global economy through high energy costs. The West has also accused OPEC of siding too much with Russia despite Western sanctions over Moscow's invasion of Ukraine.

In response, OPEC officials have said the West's money-printing over the last decade has driven inflation and forced oil-producing nations to act to maintain the value of their main export.

Watch | Pakistan to begin barter trade with Afghanistan, Iran and Russia

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Asian countries such as China and India have bought the lion's share of Russian oil exports and refused to join Western sanctions on Russia.

<h2>Surprise announcement&nbsp;</h2>

"We look forward to a resolution that will secure sustainability of balance of supply and demand," said UAE's Energy Minister Suhail Al Mazroui.

Ministers spoke to reporters in their hotels in Vienna. OPEC has denied media access to its headquarters to reporters from Reuters and other news media.

The surprise output announcement in April helped to drive oil prices about $9 per barrel higher to above $87, but they swiftly retreated, under pressure from concerns about global economic growth and demand. On Friday, international benchmark Brent settled at $76.

Last week, Saudi Arabia's Energy Minister Prince Abdulaziz said investors who were shorting the oil price, or betting on a price fall, should "watch out", which many market watchers interpreted as a warning of additional supply cuts.

Russian Deputy Prime Minister Alexander Novak, however, subsequently said he did not expect any new steps from OPEC+ in Vienna, Russian media reported. Novak, who is on a U.S. sanctions list, is expected in Vienna for Sunday meetings.

The International Energy Agency expects global oil demand to rise further in the second half of 2023, potentially boosting oil prices.

Analysts at JPMorgan, however, said OPEC had not acted quickly enough to adjust supply to record high levels of U.S. output and higher than expected Russian exports.

"There is simply too much supply," the JPMorgan analysts said in a note, noting extra cuts could amount to around 1 million bpd.

Edward Moya at brokerage OANDA said: "The oil market is doubtful a consensus for another output cut can be reached between the Saudis and Russians, but traders should never underestimate what the Saudis will do and leverage during OPEC+ meetings."

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OPEC and its allies began two days of meetings on Saturday which may culminate in further production cuts of as much as 1 million barrels per day, OPEC+ sources told Reuters, as the organisation faces flagging oil prices and a looming supply glut.

OPEC and its allies began two days of meetings on Saturday which may culminate in further production cuts of as much as 1 million barrels per day, OPEC+ sources told Reuters, as the organisation faces flagging oil prices and a looming supply glut. OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, pumps around 40% of the world's crude, meaning its policy decisions can have a major impact on oil prices. Also Read | India's electric two-wheeler retail sales hit record high in May 2023 Three OPEC+ sources told Reuters on Friday that cuts were being discussed among options for Sunday's session, when OPEC+ ministers gather at 2 p.m. (1200 GMT) in Vienna. Before then, OPEC ministers will meet at 11 a.m. on Saturday. The sources said cuts could amount to 1 million bpd on top of existing cuts of 2 million bpd and voluntary cuts of 1.6 million bpd, announced in a surprise move in April and which took effect in May. If approved, this would take the total volume of reductions to 4.66 million bpd, or around 4.5% of global demand. "This number is premature, we didn’t go into these things (yet)," Iraq's oil minister Hayan Abdel-Ghani told reporters on Saturday when asked about a possible cut of 1 million bpd. Also Read | Elon Musk's tweet on #WhatIsAWoman fans Twitter buzz. Here's all you need to know Typically, production cuts take effect the following month after they are agreed, but ministers could also agree a later implementation. Western nations have accused OPEC of manipulating oil prices and undermining the global economy through high energy costs. The West has also accused OPEC of siding too much with Russia despite Western sanctions over Moscow's invasion of Ukraine. In response, OPEC officials have said the West's money-printing over the last decade has driven inflation and forced oil-producing nations to act to maintain the value of their main export. Watch | Pakistan to begin barter trade with Afghanistan, Iran and Russia × Asian countries such as China and India have bought the lion's share of Russian oil exports and refused to join Western sanctions on Russia. Surprise announcement "We look forward to a resolution that will secure sustainability of balance of supply and demand," said UAE's Energy Minister Suhail Al Mazroui. Ministers spoke to reporters in their hotels in Vienna. OPEC has denied media access to its headquarters to reporters from Reuters and other news media. The surprise output announcement in April helped to drive oil prices about $9 per barrel higher to above $87, but they swiftly retreated, under pressure from concerns about global economic growth and demand. On Friday, international benchmark Brent settled at $76. Last week, Saudi Arabia's Energy Minister Prince Abdulaziz said investors who were shorting the oil price, or betting on a price fall, should "watch out", which many market watchers interpreted as a warning of additional supply cuts. Russian Deputy Prime Minister Alexander Novak, however, subsequently said he did not expect any new steps from OPEC+ in Vienna, Russian media reported. Novak, who is on a U.S. sanctions list, is expected in Vienna for Sunday meetings. The International Energy Agency expects global oil demand to rise further in the second half of 2023, potentially boosting oil prices. Analysts at JPMorgan, however, said OPEC had not acted quickly enough to adjust supply to record high levels of U.S. output and higher than expected Russian exports. "There is simply too much supply," the JPMorgan analysts said in a note, noting extra cuts could amount to around 1 million bpd. Edward Moya at brokerage OANDA said: "The oil market is doubtful a consensus for another output cut can be reached between the Saudis and Russians, but traders should never underestimate what the Saudis will do and leverage during OPEC+ meetings." WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. ×

OPEC+ begins meetings, likely to opt for further oil output cut amid flagging prices

Oil prices rallied for their best week in at least five years on Friday, steadying above $51 a barrel, following OPEC&#39;s decision to cut crude output to rein in a global glut that has weighed on prices for more than two years.

After the deal was announced on Wednesday, the market focused on the implementation and impact of OPEC&#39;s first output cuts since 2008, to be joined by Russia and possibly other non-OPEC producers.

Crude prices were pressured by data showing oil output in Russia rose in November to a post-Soviet high and Moscow&#39;s plan to use its record November oil production as its baseline when it cuts output.

With cuts being implemented next year only against end-2016 levels, analysts said there was still a possibility that oversupply, which has halved oil prices since 2014, remains a factor next year.

&quot;Global, and especially US, crude oil inventories are currently at extremely high levels after two years of massive oversupply,&quot; Societe Generale analysts said.

&quot;While the OPEC agreement is very significant and will result in some moderate global stock draws next year, it is likely to take more than one year for crude inventory levels to return to more normal levels.&quot;

Front-month Brent crude futures ended the session up at $54.46 a barrel, up 52 cents, 0.96 per cent. The contract rose more than 15 per cent for the week, its biggest gain since early 2009.

US&nbsp;crude&nbsp;settled at $51.68 per barrel, up 62 cents or 1.21 per cent and notched its biggest weekly gain since early 2011, with a rise of 12 per cent.

Oil drew support from a weak dollar, which slipped against a basket of currencies. Still, traders said profit-taking ahead of the weekend limited crude&#39;s price gains.

&quot;The petroleum markets have settled into quieter mixed flows as the waves created by Wednesday&#39;s OPEC announcement gradually dissipate, with some light profit taking emerging in crude oil,&quot; said Tim Evans, energy futures specialist at Citigroup.

&quot;A weaker US&nbsp;dollar is typically supportive for commodity prices and may have helped steady crude oil from the lows in today&#39;s trade.&quot;

Prices rose to session highs after the White House said it expects US&nbsp;President Barack Obama to sign US&nbsp;legislation extending sanctions against Iran for 10 years into law.

Iran is also seen as a wild card in the execution of the OPEC deal.

US&nbsp;President-elect Donald Trump&#39;s transition team is examining proposals for new non-nuclear sanctions on Iran, the Financial Times reported on Friday.

Iran had threatened on Friday to retaliate against the US&nbsp;Senate&#39;s vote to extend the Iran Sanctions Act (ISA) for 10 years, saying it violated last year&#39;s deal with six major powers that curbed its nuclear programme.

The sanctions were first adopted in 1996 to punish investments in Iran&#39;s energy industry and deter its pursuit of nuclear weapons.

Meanwhile, US&nbsp;energy companies extended their recovery in oil drilling into a seventh month this week, data from energy services firm Baker Hughes Inc&nbsp;showed on Friday.

(Reuters)

US crude settled at $51.68 per barrel, up 62 cents or 1.21 per cent and notched its biggest weekly gain since early 2011

Oil prices rallied for their best week in at least five years on Friday, steadying above $51 a barrel, following OPEC's decision to cut crude output to rein in a global glut that has weighed on prices for more than two years. After the deal was announced on Wednesday, the market focused on the implementation and impact of OPEC's first output cuts since 2008, to be joined by Russia and possibly other non-OPEC producers. Crude prices were pressured by data showing oil output in Russia rose in November to a post-Soviet high and Moscow's plan to use its record November oil production as its baseline when it cuts output. With cuts being implemented next year only against end-2016 levels, analysts said there was still a possibility that oversupply, which has halved oil prices since 2014, remains a factor next year. "Global, and especially US, crude oil inventories are currently at extremely high levels after two years of massive oversupply," Societe Generale analysts said. "While the OPEC agreement is very significant and will result in some moderate global stock draws next year, it is likely to take more than one year for crude inventory levels to return to more normal levels." Front-month Brent crude futures ended the session up at $54.46 a barrel, up 52 cents, 0.96 per cent. The contract rose more than 15 per cent for the week, its biggest gain since early 2009. US crude settled at $51.68 per barrel, up 62 cents or 1.21 per cent and notched its biggest weekly gain since early 2011, with a rise of 12 per cent. Oil drew support from a weak dollar, which slipped against a basket of currencies. Still, traders said profit-taking ahead of the weekend limited crude's price gains. "The petroleum markets have settled into quieter mixed flows as the waves created by Wednesday's OPEC announcement gradually dissipate, with some light profit taking emerging in crude oil," said Tim Evans, energy futures specialist at Citigroup. "A weaker US dollar is typically supportive for commodity prices and may have helped steady crude oil from the lows in today's trade." Prices rose to session highs after the White House said it expects US President Barack Obama to sign US legislation extending sanctions against Iran for 10 years into law. Iran is also seen as a wild card in the execution of the OPEC deal. US President-elect Donald Trump's transition team is examining proposals for new non-nuclear sanctions on Iran, the Financial Times reported on Friday. Iran had threatened on Friday to retaliate against the US Senate's vote to extend the Iran Sanctions Act (ISA) for 10 years, saying it violated last year's deal with six major powers that curbed its nuclear programme. The sanctions were first adopted in 1996 to punish investments in Iran's energy industry and deter its pursuit of nuclear weapons. Meanwhile, US energy companies extended their recovery in oil drilling into a seventh month this week, data from energy services firm Baker Hughes Inc showed on Friday. (Reuters)

Oil rallies to best week in years after OPEC output deal

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OPEC+ begins meetings, likely to opt for further oil output cut amid flagging prices

Oil rallies to best week in years after OPEC output deal