Goldman Sachs Expects Crude Oil Prices to Rise by $10

It will take some time for the oil market to get used to the flood of shale oil production capacity which was put in place in the U.S. and other countries in the run-up to the 2014 collapse in prices.

This deal will obviously enhance the prospects for the energy industry with the impacts already being felt as oil price jumped more than 5 per cent in NY after the agreement was reached.

United States light crude oil was down 17 cents at $46.88 a barrel, after first hitting $47.47, its highest since September 8.

OPEC has proposed reducing its collective output to between 32.5 million barrels a day and 33 million barrels a day.

The 14-member OPEC produces more than a third of the world’s oil.

UK Brent crude dipped 37 cents to $48.32 a barrel on Thursday morning on the London ICE Futures Exchange, after rising to $49.09 on Wednesday, while US West Texas Intermediate fell 18 cents to $46.87 on the New York Mercantile Exchange.

The 14-member oil group said it will wait until the official OPEC meeting in Vienna on November 30 to finalize the decision, when an invitation to join cuts could also be extended to non-OPEC countries such as Russian Federation.

“We’ll now wait for the November Opec meeting for a plan to formalise”, he said.

Crude oil prices meandered for most of the trading day Wednesday before ministers from the Organization of Petroleum Exporting Countries emerged from meetings in Algeria with an agreement to take extraordinary action meant to pull the market into balance.

Zangeneh said many countries had wanted Iran to freeze its production or even decrease it ever since a previous OPEC summit in February, but that Iran’s insistence counteracted such inclinations.

Brent crude settled 1.1 per cent, or up US55 cents, at $US49.24 a barrel.

A decline in crude stocks signals stronger consumption and is positive for oil prices.

The U.S. Energy Information Administration released its weekly crude oil inventory report on September 28, 2016.

Some analysts were upbeat about the deal.

Over the past year and a half, the Maduro government has tirelessly lobbied fellow oil exporters for a production cap – efforts that have born little fruit until now due to the resistance of Saudi Arabia.

“These collusive agreements rarely amount to much over the long-term but in the near term here, I think we do have oil moving back into a more sustainable region”, said Wells Fargo’s Jacobsen.