OPEC convinces investors that its oil production cuts are real

The Organisation of Petroleum Exporting Countries (OPEC) appears to have persuaded investors that it’s making good on promised production cuts. Money managers are the most optimistic on West Texas Intermediate oil prices in at least a decade as the OPEC and other producers reduce crude output. Saudi Arabia has said more than 80 per cent of the targeted reduction of 1.8 million barrels has been implemented. Oil shipments from OPEC are plunging this month, according to tanker-tracker Petro-Logistics SA. "All the signs are pointing to a pretty significant OPEC cut," Mike Wittner, head of commodities research at Societe Generale SA in New York, said by telephone. "Until this week we were only getting data from the producers, now the tanker traffic seems to be supporting this view." OPEC will reduce supply by 900,000 barrels a day in January, the first month of the accord’s implementation, said the Geneva-based Petro-Logistics. That’s about 75 per cent of the cut that the producer group agreed to make. Eleven non-members led by Russia are to curb their output in support. Hedge funds boosted their net-long position, or the difference between bets on a price increase and wagers on a decline, by 6.1 per cent in the week ended January 24, US Commodity Futures Trading Commission data show. WTI rose 1.3 per cent to $53.18 a barrel in the report week before settling at $53.17 January 27 on the New York Mercantile Exchange. OPEC members Saudi Arabia, Kuwait and Algeria have said they’ve cut output this month by even more than was required, while Russia said it’s curbing production faster than was agreed. (Mark Shenk/Bloomberg)

More from Business News

  • UAE President issues AI Council resolution

    President His Highness Sheikh Mohamed bin Zayed Al Nahyan, has issued a resolution to appoint His Highness Sheikh Tahnoon bin Zayed Al Nahyan as Chairman of the Artificial Intelligence and Advanced Technology Council (AIATC).

  • DP World advances first phase of $80m Sokhna Logistics Park

    DP World is advancing with the development of its Sokhna Logistics Park, in Egypt. The $80 million (AED 293 million) state-of-the-art logistics hub, is set to enhance Egypt’s logistics infrastructure and position the country as a key regional trade hub.

  • Emirates and Air Peace team up to boost Nigeria travel options

    Emirates, the world’s largest international airline, has signed an interline agreement with West Africa’s largest carrier, Air Peace, enhancing connectivity for passengers travelling to and from Nigeria.

  • $640 bn needed annually to meet oil demand growth, says OPEC

    Haitham Al Ghais, Secretary-General of OPEC, said investment needs in the oil sector will remain substantial to meet the expected growth in oil demand, with cumulative investment requirements estimated at $17.4 trillion between 2024 and 2050, or approximately $640 billion annually.

Blogs