Oil eased in Asian trade after OPEC’s decision

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Oil eased in Asian trade on Thursday, taking a breather after soaring nearly 10 percent on the wings of OPEC’s decision to carry out its first output cut in eight years.

The Organization of the Petroleum Exporting Countries at a meeting in Vienna Wednesday agreed on specific targets to enact a preliminary deal struck in September designed to ease a global crude supply glut and boost prices, reports BSS.

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Many analysts had expected the producers’ cartel to fail to reach a deal as major players like Iran, Iraq and Saudi Arabia remained divided ahead of the meeting.

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At around 0150 GMT, US benchmark West Texas Intermediate for January delivery was down 28 cents at $49.16 and Brent crude for February dipped 18 cents at $51.66.

“I think the market in Asia is just catching its breath after last night’s moves,” said Jeffrey Halley, a senior market trader at OANDA.

“I would expect Asia to trade in a sideways range now until Europe gets in in the early afternoon,” he told AFP.

In Vienna, the 14-member OPEC agreed to lower its monthly output by 1.2 million barrels per day (bpd) to 32.5 million bpd from January 1.

Qatar’s Energy Minister Mohammed Bin Saleh Al-Sada said non-member Russia committed to reducing its output by 300,000 bpd, half of a hoped-for 600,000 bpd reduction from outside the organisation.

“Cuts have been shared across all members, including the recalcitrant Iran and Iraq,” Halley said.

Prices had fallen to near 13-year lows of below $30 a barrel in February from peaks of more than $100 in June 2014 largely due to an oversupplied market outpacing demand.

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