Brent crude oil went over $54 a barrel on Thursday, it continue to move after Russia and OPEC agreed to restrict oil production even though analysts warned other oil producers would increase supply. The Organization of the Petroleum Exporting Countries has agreed on Wednesday to reduce oil production. This has been the first oil output reduction since 2008, Saudi Arabia and Iran also agreed to cut output.
“OPEC has agreed to an historic production cut,” analysts said. “The cut of 1.2 million barrels per day was at the upper end of expectations (0.7-1.2 million bpd). An additional cut of 0.6 million bpd from non-OPEC countries could significantly add to what has been announced by OPEC, said an analyst at AB Bernstein.
Jason Gammel of U.S. investment bank Jefferies said, “OPEC has deliver an agreement.” “For the time being, oil prices have received a huge support.” OPEC produces 33 percent of global oil, which is over 33 million barrels per day. The deal will reduce output by 1.2 million bpd from January 2017 to bpd levels of the prior year, January 2016.