- Title: Oil jumps 8 percent on prospects for big OPEC output cut
- Date: 30th November 2016
- Summary: VIENNA, AUSTRIA (NOVEMBER 30, 2016) (REUTERS) OPEC SIGN ON OPEC HEADQUARTERS OPEC HEADQUARTERS WITH SIGN (English) READING: "ORGANIZATION OF THE PETROLEUM EXPORTING COUNTRIES" SAUDI ARABIA ENERGY MINISTER, KHALID AL-FALIH, ARRIVING FOR MEETING IRAN OIL MINISTER, BIJAN ZANGANEH, ARRIVING FOR MEETING GABON MINISTER OF PETROLEUM AND HYDROCARBONS, ETIENNE DIEUDONNE NGOUBOU, ENTERING OPEC HEADQUARTERS ARMED SECURITY IN FRONT OF OPEC HEADQUARTERS ALGERIA ENERGY MINISTER, NOUREDDINE BOUTERFA, ARRIVING FOR MEETING HEAD OF LIBYA'S OPEC DELEGATION, MOSSA ELKONY, ARRIVING FOR MEETING
- Embargoed: 15th December 2016 11:49
- Keywords: OPEC Oil Iraq Saudi Arabia oil prices oil production
- Location: VIENNA, AUSTRIA/ LONDON, ENGLAND, UNITED KINGDOM
- City: VIENNA, AUSTRIA/ LONDON, ENGLAND, UNITED KINGDOM
- Country: Various
- Reuters ID: LVA0015AMXPAF
- Aspect Ratio: 16:9
- Story Text: Oil prices jumped more than eight percent on Wednesday (November 30) as some of the world's largest oil producers gathered in Vienna to agree on a production cut that could be bigger than expected.
The Organization of the Petroleum Exporting Countries (OPEC) started a meeting at 0900gmt at its Vienna headquarters to discuss terms of a potential deal to cut production in an effort to prop up prices that have fallen by more than half since 2014 due to oversupply.
A source told Reuters that delegates were now discussing a bigger than expected cut in production of 1.4 million barrels per day (bpd).
OPEC is close to clinching a deal to limit oil output, according to Saudi Energy Minister Khalid al-Falih who spoke to Reuters in a text interview. He said that Saudi Arabia will take a "big cut" in its production levels.
In an opening statement in Vienna, OPEC President, Dr. Mohammed Bin Saleh al-Sada said it was vital that oil stock levels start to fall to bring more stability to the market.
The 14-country OPEC, which accounts for a third of global oil production, made a preliminary agreement in Algiers in September to cap output at around 32.5-33 million bpd versus the current 33.64 million bpd to prop up oil prices, which have halved since mid-2014.
Chief economist of corporate investment banking company Panmure Gordon, Simon French, said oil prices had jumped because the markets cannot rebalance in 2016 without OPEC action.
"It will be material action from OPEC to cut production that will bring the market into balance sooner and push oil above 50 (dollars per barrel) and towards 60, the kind of level that a lot of the OPEC producers both want and need," he said.
He said one element which could prevent a deal from happening was which countries would accept reducing their output. He questioned if Saudi Arabia was ready to be the "swing producer" to bring down production.
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