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Main The production reduction agreement reached by oil-producing countries continues to push up international oil prices, with London Brent crude oil futures prices reaching their highest level in more than a year. Industry insiders predict that the news of production cuts may push oil prices to the dollar level.
Several non-OPEC oil-producing countries recently reached an agreement on production reduction in Vienna and decided to reduce their daily crude oil production by 10,000 barrels starting from next month. The agreement is valid for six months, and whether it is renewed will depend on market conditions. Previously, OPEC had decided to reduce its crude oil production by 10,000 barrels per day at the Vienna meeting at the end of the month.
Boosted by this news, international oil prices rose daily. As of the close of the day, the price of light crude oil futures for delivery in 2020 on the New York Mercantile Exchange rose. US dollars to close at . US dollars per barrel, an increase of .%. The price of London Brent crude oil futures for delivery in 2020 rose. In US dollars per barrel, the increase was .%. It is worth noting that the price of Brent crude oil futures in London rose to a high since January 2019, reaching US$.
Regarding the future trend of oil prices, Nigeria’s Petroleum Minister Kahiku told the media that around US dollars per barrel is the optimal level. But he stressed that OPEC may take further action next summer to balance the market. "I think this is just the beginning of the upward momentum and there is more than one agreement reached in Vienna. "In six months, OPEC will review this agreement, and if we feel that the market is not balanced enough, more production cuts will come," he said. &
Kashiku told the media: "I think this production reduction agreement is different. This time there is an important consensus." Every oil-producing country is suffering from this, and every country realizes that it needs to do this. &
It is rare in recent years for several major oil-producing countries to work together to reduce production. The agreement, in which Russia promised to cut 10,000 barrels of oil and the remaining non-OPEC countries jointly cut 1,000 barrels of oil, represents the largest non-OPEC production cut in history. Saudi Arabia will bear most of the production cuts, with production cuts of nearly 10,000 to 10,000 barrels per day. Kuwait, Qatar and the United Arab Emirates agreed to reduce their daily production by 10,000 barrels, Iran agreed to freeze production at a level close to 10,000 barrels per day, and Iraq agreed to reduce its daily oil supply by 10,000 barrels to 10,000 barrels per day.
& Both OPEC and non-OPEC oil-producing countries understand that both parties must abide by the agreement. I think the urgency now and the fact that their economies have reached a tipping point is reason enough to motivate every oil-producing country to agree. & Kashiku said.
The British "Financial Times" article stated that the agreement represents a major reversal in the policies of oil-producing countries represented by Saudi Arabia. Two years ago, Saudi Arabia tried to crack down on U.S. shale and other high-cost oil producers by increasing production in the face of rapid growth in oil supplies from outside OPEC after four years of oil prices remaining above the dollar-per-barrel level. This move caused a rapid collapse in oil prices, which had an impact on the entire oil industry and plunged oil-dependent economies into turmoil.
Two years of low oil prices have hammered the economies of these big producers, prompting them to put aside their differences. Saudi Arabia, which has been particularly hard hit by low oil prices, has launched a series of painful economic reforms and fiscal austerity measures.
OPEC hopes that the agreement will help the oil market escape from the downturn and move toward recovery. The low oil prices have dealt a huge blow to the share prices of oil companies and sent several major oil-producing countries into a spiral of economic recession.
Many market participants said that the recent trend of international oil prices still depends on the implementation of the production reduction agreement, so there is still a certain degree of uncertainty. In addition, U.S. shale oil companies will also be stimulated by oil prices and increase production, which will have an impact on oil price trends. Create pressure.