Marathon OPEC meeting breaks up without agreement

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After more than six hours of talks on Thursday, delegates meeting in Vienna were unable to sign off on the details of an agreement on how further cuts should be shared out.

Producers face another year of rising output from the United States along with other non-OPEC producers Brazil and Norway.

OPEC's effort to deepen cuts and increase member compliance was also driven by the group's de facto leader Saudi Arabia's hopes to see higher oil prices to support its budget and initial public offering (IPO) of state-owned Saudi Aramco.

Ministers gathered at Opec headquarters in Vienna "decided for an additional adjustment of 500 (thousand barrels per day)", effective as of 1 January 2020, according to a statement issued after the meeting.

OPEC makes up a significant share of total production.

OPEC+ members face a hard decision in terms of making production cuts past March or not. The move is created to combat stagnant global economic growth blamed on the U.S.

Benchmark Brent oil prices were steady on Friday near $63 per barrel.

"Saudi Arabia has signalled that it seeks stricter compliance by other producers and is no longer willing to shoulder the burden of sub-compliance by others, such as Russia, Iraq and Kazakhstan, which have all failed to reach 100 per cent compliance with their target cuts", Tonhaugen said.

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That is something that the alliance has struggled to achieve throughout the three years of its existence, with some countries such as Iraq actually increasing output after promising to cut.

Oil is still set for a weekly gain because of shrinking American crude stockpiles and signs of progress on a possible U.S.

Iranian Oil Minister Bijan Namdar Zangeneh told reporters as he left the meeting in the Austrian capital late on December 5, "Yes, we have an agreement".

Investors seemed impressed by Opec's resolve, however, pushing up energy prices sharply.

It's unclear whether energy prices will continue to rise, however.

"The oil market got livelier, but not because of the Opec meeting", said Norbert Rücker, an analyst at Julius Baer. "However, deeper compliance is imperative and hence the deal will last only for one quarter so that they can assess compliance then", said Amrita Sen, co-founder of Energy Aspects.

For Russia, it means that some 760,000 bpd of condensate would be excluded from calculations, meaning Russian baseline production used for cuts would decline to around 10.66 million bpd from 11.42 million.

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