In major shift, U.S. now exports more oil than it ships in

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In major shift, U.S. now exports more oil than it ships in

OPEC's president says the oil cartel in conjunction with non-OPEC producers including Russian Federation have agreed to cut oil production by 1.2 million barrels a day in January for six months.

The kingdom's diplomatic position has been badly weakened by the furore over the killing of Saudi journalist Jamal Khashoggi.

"OPEC group countries are contributing 800,000 barrels per day as a cut, and the non-OPEC (countries) will be contributing 400,000 barrels per day", Emirati Oil Minister Suhail Mohamed al-Mazrouei said at a news conference.

The ministers have just opened the 5th Opec/non-Opec meeting in Vienna. The president has taken to using his Twitter account to berate the group's policies and sees low oil prices as key to sustaining America's economic growth.

Soon enough, the market will need both the USA shale industry and Saudi Arabia to increase production to offset falling output from Iran, due to economic sanctions, and Venezuela, because of political turmoil. Iran, under pressure from sanctions, won an exemption from the cut.

Signs about a positive outcome of the pally with the non-OPEC allies emerged early Friday, with Russian Federation agreeing to cut output by 200,000 barrels per day.

A day later, at OPEC headquarters, heated words were exchanged between Bijan Zanganeh, Iran's oil minister, and Al-Falih, according to people familiar with what happened.

The slight recovery came after crude slumped by nearly 3 per cent the previous day, with the Opec ending a meeting at its headquarters in Vienna, Austria, on Thursday without announcing a decision to cut crude supply. The U.S. imports more than 7 million barrels a day of crude from all over the globe to help feed its refineries, which consume more than 17 million barrels each day.

Moscow was definitely reluctant to lower its output, to the extent Falih and others within the Opec wanted.

That has created a dilemma for Saudi-led OPEC, which wants to maintain higher prices but avoid ceding more market share to shale producers.

In the last week of November, the country exported more oil, gasoline and other petroleum products than it imported, marking a milestone for the domestic industry and for a White House that has been eager to secure what it calls "energy independence" with new domestic production. Brent Crude price was $61.97/barrel at 6pm on Wednesday.

Also, it seems that factors other than OPEC production are playing a bigger role in determining oil prices.

Oil prices have fallen from a four-year high above $86 a barrel in early October on concerns over excess supply.

"The choice of October as the benchmark for output cuts will in fact make output cuts larger as, Saudi Arabia, for example, raised production further in November". "Opec is doing what they should do, managing volatility to attract capital back to the sector".

Although the United States awarded last-minute sanctions waivers to major importers of Iranian oil, Iran began under-reporting its official export levels in mid-September, in an effort to evade sanctions.

"We'll cut 1.2 million bpd total", Iraq's Oil Minister Thamer Abbas al-Ghadhban told reporters after the meeting. In the past, it was been surging US production numbers.

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