Cut OPEC Oil Production to Boost Oil Prices
Suara Press. Jakarta, World oil prices traded higher in early trading this week. Quoted from Reuters, at the beginning of this week the price of Brent world oil was traded at the price level of US $ 61.85 per barrel, up 0.29 percent compared to trading last weekend.
Executive Vice President at Stratas Advisors John Paisie said the strengthening of oil prices was supported by Saudi Arabia's decision and members of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC member countries to cut production. Saudi Arabia and OPEC member countries are known to agree to cut their oil production in a combined amount of 800 thousand barrels per day.
Meanwhile, non-OPEC member states said they would cut production by 400 thousand barrels per day. The cut in production is higher compared to market expectations, which only expect oil production to be cut by 1 million barrels per day. The cut began in January.
"I think the Saudis are trying to walk on a rope. They want to make sure they can maintain relations with the US, but they also need to cut because they need higher oil prices to balance the budget," he said.
Meanwhile, global oil strategist at London's BNP Paribas, Harry Tchilinguirian, said that if oil production cuts of 1.2 million barrels per day were fully implemented could be enough to overcome the weakening oil prices. "But the cuts do not eliminate the pressure," he said.
Oil prices have been under pressure recently. Since last October, oil prices have fallen by around 30 percent. This weakening was triggered by the increase in world oil supply.
In addition, the weakening was also triggered by a decline in world oil demand.
Executive Vice President at Stratas Advisors John Paisie said the strengthening of oil prices was supported by Saudi Arabia's decision and members of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC member countries to cut production. Saudi Arabia and OPEC member countries are known to agree to cut their oil production in a combined amount of 800 thousand barrels per day.
Meanwhile, non-OPEC member states said they would cut production by 400 thousand barrels per day. The cut in production is higher compared to market expectations, which only expect oil production to be cut by 1 million barrels per day. The cut began in January.
"I think the Saudis are trying to walk on a rope. They want to make sure they can maintain relations with the US, but they also need to cut because they need higher oil prices to balance the budget," he said.
Meanwhile, global oil strategist at London's BNP Paribas, Harry Tchilinguirian, said that if oil production cuts of 1.2 million barrels per day were fully implemented could be enough to overcome the weakening oil prices. "But the cuts do not eliminate the pressure," he said.
Oil prices have been under pressure recently. Since last October, oil prices have fallen by around 30 percent. This weakening was triggered by the increase in world oil supply.
In addition, the weakening was also triggered by a decline in world oil demand.
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