OPEC Deal Looks Like A Bust, Crude Futures Fall
While OPEC reached a preliminary agreement last month to limit the group’s daily production to no more than 33 million barrels a day, the agreement failed to include any individual quotas and now looks like it may fall apart.
Iraq, OPEC’s second-biggest producer, recently said it should be exempt from the deal because it needs oil revenue to fund its war against the Islamic State, MarketWatch reports. The news pushed oil prices down on both the New York Mercantile Exchange and London’s ICE Futures, easing the gains made this month.
“Given that Iran, Libya and Nigeria are already exempt, leaving Iraq’s 4.7 million barrels a day in production off the list would either prompt others to abandon a deal or greatly weaken the resulting agreement,” says Citi Futures analyst Tim Evans. Skeptics say that even if a deal is struck during OPEC’s Nov. 30 meeting, members will likely ignore their quotas. [MW]