Market will have to wait 2 months to find out how the deal will work
by Myra P. Saefong
The Organization of the Petroleum Exporting Countries has a preliminary plan that would cap oil production slightly below its current pace, but traders are debating whether it will make a lasting difference.
“Any production restraint is a big deal,” said Phil Flynn, senior market analyst at Price Futures Group.
The 14-nation group of major oil producers is targeting a production cap that would hold output to between 32.5 million and 33 million barrels a day. OPEC’s latest monthly oil report pegged current member output at 33.24 million barrels a day. But the output agreement won’t be completed until at least Nov. 30.
To reach that output target, OPEC members would need to reduce the rate at which they’re producing crude oil.