After the preliminary agreement of the OPEC members to reduce oil production to 32.5-33 million barrels per day, which was adopted last Wednesday, oil prices have sharply grown. This Monday November futures for crude oil Brent at ICE Futures were traded at a price of 50.06 per barrel.
Spot price of crude oil Brent has reached the level of 50.70 per barrel. It is expected that at the next meeting in Vienna on 30 November, OPEC will finalize the details of the agreement. OPEC countries are ready to cut oil production, if Iran agrees to freeze production at the level of 3.6 million barrels a day, which may not happen.
OPEC countries used to violate agreements before; oil production in the countries outside OPEC is growing. Libya and Nigeria are increasing production after the recent interruptions in oil supply due to ongoing political tensions in these countries.
A Declaration of intentions does not necessary mean that specific agreement will be finally taken.
It is possible that the efforts of OPEC aimed at reducing oil production will be in vain, because other countries are quickly increasing oil production.
The fight for the share in the oil market will only increase.
In this situation, OPEC decisions may not be implemented.
Note that last week the number of active rigs in the USA has increased by 7 units, up to 425, which is a negative factor for the oil market.