Oil prices up more than 26% driven by OPEC deal

AVN.- Since late last year to date, the main oil baskets have recovered more than 26% after the Organization of Petroleum Exporting Countries (OPEC) and 11 outside producers agreed to cut production by almost 1.8 million barrels per day (bpd).
This agreement has helped to reduce global supply glut and push the oil price above $ 50, higher than the $ 30 that oil indicators marked in the first quarter of last year, the lowest price in the last 14 years.
The global agreement, whose extension will be discussed Thursday in Vienna, Austria, has kept the OPEC basket above $ 51 this 2017; slightly more than $ 10 compared to the $ 40.76 it averaged in 2016.
In the case of Brent crude, which is the benchmark in Europe, this basket has also risen above $ 10 (22%) after going from $ 44.98 in 2016 to $ 54.98 this year.
The same happened to the US West Texas Intermediate (WTI), whose average of $ 43.32 in 2016 climbed to $ 51.21 so far this year, a growth of more than 18%.
The oil supply cut agreement has been one of the tools used by major crude oil producers to curb rising inventories, which have been saturated in the past three years by the over-production of shale by the United States.
The agreement, which expires in June, is expected to be extended in Vienna at a meeting that OPEC will hold with other producing countries, in the framework of the 172 ministerial conference of the bloc.
The meeting will take place amid a climate of optimism following the recent positions of Saudi Arabia and Russia, the two largest producers of the world, who spoke in favor of extending the pact for another nine months until March 2018.
After knowing the views of Riyadh and Moscow, the Venezuelan government expressed its support for the proposal to extend the measure after ensuring that it represents “an additional impetus to ensure market stability in the long term.”
The agreement commits all 13 OPEC members to take out 1.2 million barrels per day and non-OPEC to trim 558,000 bpd, to set the group’s joint production ceiling at 32.5 million barrels per day.


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