Oil Prices on the Rise as Saudi Arabia Guts Daily Production
Published on: 12/6/19 10:53 AM
President Donald J. Trump has often boasted of the United States’ position as the top oil producer. Now, countries that comprise the Organization of the Petroleum Exporting Countries (OPEC) have responded by gutting their daily oil output. Led by Saudi Arabia, one of the top oil exporters, the member countries are scheduled to meet on Friday to chart the way forward.
Forex broker comparison service FXBrokerFeed brings you news and trends in the FX broker market regarding the recent surge in oil prices and what it means for financial markets across the world.
OPEC Mulling Cuts to Oil Production
OPEC, led by Saudi Arabia and Russia, is set to meet on Friday. The organization has already agreed to cut oil production by more than 400,000 barrels per day. Currently, the organization produces over 1.2 million barrels of oil per day. The organization’s decision has led to a rise in oil prices across the world. Oil prices
rose on Thursday. The Brent Crude futures rose by 0.6% (an equivalent of 35 cents) to $63.29 per barrels. In the U.S., the West Texas Intermediate stayed constant at $58.42 per barrel, an indication of the United States’ dominance in the oil industry.
OPEC hopes to increase its members’ compliance to counter the U.S.’s rise. The member countries hope that their planned production cuts will increase oil prices. Saudi Arabia stands to reap the most as it prepares to roll out the IPO of Saudi Aramco, a state-owned oil corporation.
Stability is Fleeting
The United States’ move to increase its oil production has set a precedent for other oil-producing non-OPEC members such as Norway and Brazil. These countries plan to increase their oil production to meet domestic demands. If (and when) this happens, oil prices will dip further, putting OPEC member countries into further turmoil.
The biggest beneficiaries of the ongoing oil price wrangles are consumers. They are set to benefit even more in the coming year.
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