Big agreement between oil-producing countries have led to price increases in oil.
Oil prices are rising, after a number of countries agreed to cut production of oil.
watching the trend out across a number of types of oil on the night of Monday Danish time.
the Organization of the petroleum exporting Countries (Opec), Russia and other oil-producing nations signed on Sunday an agreement on a record-breaking reduction in the production.
a total Of ten percent of the international production cut.
the Purpose is to get the oil up in price after the hefty dive as a result of coronakrisen and price war between Saudi Arabia and Russia.
in Several places, the market has also immediately responded with price increases.
The benchmark Brent oil in the course of trading increased by 5,0 percent to 33,08 dollar barrel on asian markets.
In the same way West Texas Intermediate oil increased by 7.7 percent to 24,52 dollar per barrel.
Opec secretary-general Mohammad Barkindo, has called the agreement “historic”.
Though Monday’s price increases immediately is a good sign for the oil-producing economies, it is not enough to offset the decline that has taken place in recent months.
Several analysts also questioned whether the agreement will prove to be enough.
Thus will be slightly less reductions than expected, and the agreement would not necessarily make up for an expected decline in demand.
Some are expecting a drop in demand of up to 25 million barrels per day, while there is only planned spending cuts of about ten million barrels per day.
in Addition, storage facilities are available the world over to be filled up.
the Agreement fell initially in place Thursday. But Mexico did not want to follow the requirements, the country was imposed in the agreement, and therefore drew the process out to Sunday.
– the Agreement is a bit less than the market had expected, and Mexico seems to have slipped easily, says Andy Lipow, president of consulting firm Lipow Oil Associates LLC, to Bloomberg News.
– The hard work lies ahead of us, and the market is very sceptical about whether Opec+ (the informal name for the Opec and several oil-producing countries outside of the association, red.) actually will be able to deliver reductions of around ten million barrels of oil per day.
/ritzau/AFP
