Analysts expect rising demand for oil to falter next year as the US-China trade war threatens to stifle global economic growth. The group has been withholding 1.2 million bpd and the increased amount represents about 1.7% of global oil output.
Ministers gathered at Opec headquarters in Vienna "decided for an additional adjustment of 500 (thousand barrels per day)", effective as of 1 January 2020, according to a statement issued after the meeting.
OPEC is likely to shoulder approximately 340,000 bpd in fresh cuts and non-OPEC producers an extra 160,000 bpd, one source said on Friday. This is highly unlikely, however, the market is up nine weeks from its last main...
OPEC makes up a significant share of total production.
OPEC countries have reached a consensus on a deal on cutting oil production at the ministerial meeting on Thursday and plan to continue negotiations on Friday, Saudi Arabia's Energy Minister Abdulaziz bin Salman Al Saud told reporters.
Benchmark prices for Brent crude rose 6% over the course of the meeting in Vienna to stand north of $64 per barrel.
OPEC+ lowered output by 1.2 mbpd earlier in 2019, with the agreement due to end in March 2020.
Oil prices surged on Wednesday on expectations of deeper OPEC cuts and data showing a large drop in US crude inventories last week. But they also do not want to lose global market share to the United States, which keeps pumping more oil.
"The ruckus reflects pushback by producers facing stronger pressure than in the past to comply and contribute real, voluntary cuts", said Bob McNally, president of Rapidan Energy Group and a former oil official at the White House under President George W. Bush.
USA drillers have been breaking production records even as they have cut the number of oil rigs in operation for 12 straight months, boosting the United States to the top world producer spot.
Not all OPEC members were convinced of the need to cut deeper.
But Saudi Energy Minister Abdulaziz bin Salman said the actual deal needed to be agreed with the additional 10 countries of the so-called OPEC+ group, including Russian Federation, due to meet on December 6.
That is something that the alliance has struggled to achieve throughout the three years of its existence, with some countries such as Iraq actually increasing output after promising to cut. The new target for Iraq was a particular sticking point during the six hours of talks on Thursday, delegates said.
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