Oil prices inched up on Friday morning in Asia, as oil production cartel OPEC plans to make public its output cut quotas, amidst market concerns over a global glut.
Crude Oil WTI Futures for February delivery rose 1.35% to $46.5 a barrel at 1:02 PM ET (06:02 GMT) on the New York Mercantile Exchange, while Brent Oil Futures for February delivery also inched up 0.55% to $55.09 per barrel as shown on London’s Intercontinental Exchange.
The Organization of the Petroleum Exporting Countries released a letter yesterday, in which Secretary-General Mohammad Barkindo said that member states should reduce output to 3.02%, which is higher than the originally agreed figure of 2.5%, various reports showed.
Barkindo urged member countries to publicly announce their output cut quotas.
“In the interests of openness and transparency, and to support market sentiment and confidence, it is vital to make these production adjustments publicly available. I would urge Your Excellencies to kindly make positive announcements reinstating your countries’ commitment to implementing the agreed decisions,” Barkindo reportedly wrote.
News report that Saudi Arabia’s table of voluntary supply cuts showed the kingdom would reduce production by 322,000 barrels per day (bpd) from January next year, while Russia would reduce production by 230,000 bpd.
The cartel was reported to cut 812,000 bpd, while its allies would slash 383,000 bpd to bring the total of output reduction to 1.2 million bpd. It is expected to publish the full list of supply cuts by the end of next week.
“The current oil prices will force OPEC to increase compliance with the production cut deals, supporting Brent prices. The temporary recovery in prices has been driven by short-sellers buying back,” Wang Xiao, head of crude research at Guotai Junan futures.