OPEC, Russia and other oil major producers reached an unusual agreement on production quotas on Tuesday, with Saudi Arabia committing to reducing its oil production by one million barrels a day and Russia and Kazakhstan winning relatively modest production increases. The effect will be an overall reduction in oil production. Brent crude rose past $53 a barrel, and West Texas Intermediate exceeded $50 as traders welcomed the Saudi willingness to give up some barrels in an effort to stabilize the market. That tension could be a harbinger of difficulties in restraining production in the coming months. Finding that they were unable to head off Russia’s demand for a production increase, Saudi Arabia appears to have largely given in to preserve at least a semblance of unity.

Source: International New York Times January 05, 2021 19:40 UTC