Co-ordinated action among global producers to enact supply cuts has helped to put a “floor” under crude prices around $60 a barrel, the International Energy Agency said on Thursday.
“The agreement aims to achieve relative stability and to bring the market towards balance. So far, the Brent crude oil price seems to have found a floor,” said the IEA in its monthly oil market report.
Saudi Arabia-led Opec and its allies including Russia agreed last week in Vienna to trim supplies by 1.2m barrels a day to bring supply and demand into balance and keep oil prices in check.
In October, Brent hit $86 a barrel on concerns the market could face a squeeze as US sanctions against Iran took effect. But prices only fell below $60 as producers overcompensated for the supply loss.
For the kingdom and Russia, “prices falling further would place their budgets under great stress,” said the IEA.
“Such volatility is not in the interests of producers or consumers,” the Paris-based body said.
The report’s highlights:
Source: Financial Times
