Oil markets were steady yesterday as traders took another look at an Opec deal to cut production after disbelievers triggered two days of harsh price falls.
Traders marked values more than a dollar lower on Monday and Tuesday, even as the cartel of the worlds leading oil producers met in Vienna to agree a landmark production restraint accord designed to support sagging oil prices.
The price slide halted yesterday and the value of international benchmark Brent blend was up eight cents at $14.34 a barrel at 12.00 GMT.The next couple of days are critical, said an oil futures broker. If the market could stabilise at these levels then it could force some shortcovering and push prices higher.
An emergency Organisation of Petroleum Exporting Country meeting that ended in the early hours of Tuesday approved a 1.245 million barrels per day (bpd) cartel contribution to a two per cent cut in global output.
Other cuts will come from non-OPpec Norway, Mexico, Egypt, Oman and Yemen, which have pledged to trim 270,000 bpd for a total of 1.5 million bpd in overall promised reductions.
The object was to rescue oil from a calamitous 40 per cent price slide that took Brent down to a nine-year low of $11.90 a barrel.
The cuts achieved their goal in the days after they were agreed at a meeting 12 days ago in Riyadh between Saudi Arabia, Venezuela and Mexico, boosting levels by some $3.
But scepticism that 1.5 million bpd worth of cuts would be sufficient to stabilise a market drowning in unwanted oil and doubt over future OPEC member commitment to restraint took the shine off the accord.
