OPEC, US Deal Raise Oil Price

Oil price moved up today after OPEC and other major producers agreed to continue reining in output until the end of next year as to reduce the global oil glut and boost prices.
After the announcement Brent was trading at $63.17, up 54 cents this afternoon. US light crude was up 43 cents at $57.82.

OPEC and other non-OPEC producers led by Russia agreed yesterday to keep limits on output in place until the end of next year.

According to Analysts OPEC and the co-operating countries have created a high level of confidence that they are standing behind the market, signaling they're going to drive the inventories further down.

The deal, which has been in place since January and was due to expire in March, has seen producers reduce output by 1.8 million barrels per day (bpd), helping to halve global oil oversupply over the past year.

But they signaled a possible early exit from the deal should the market overheat and prices rise too far.

With concern that a further Price rise could fuel more drilling in the US, which is not a party to the agreement a rising US production has been a problem to

OPEC undermining the impact of its output cuts.

US oil production hit a new record of 9.68 million bpd last week, according to government data released this week.

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Even though U.S. shale oil producers led by Texas and North Dakota the two largest U.S. shale-producing states and OPEC appear to have called a truce of sorts, even though there is no sign the U.S. industry will do anything to help reduce the global oil supply glut.

Ryan Sitton, a commissioner on the Texas Railroad Commission was quoted in a phone interview from Austin recently  saying  “Now that it seems prices are looking to stabilize with this OPEC deal around $60 (per barrel), I think that’s going to be a very nice price environment for folks around the state,” to further compound the issue.

The Texas Railroad Commission regulates the Texas oil industry a state that pumps over 3 million barrels per day, more than some OPEC members.