Despite warnings by Opec that prices could fall below dollars 10 if substantial cuts were not agreed, Saudi Arabia refused to accept any reduction, and ministers agreed to hold the output ceiling at 24.52m barrels a day for the rest of the year. Current production is about 25m bpd.
Analysts believe that the decision to hold the ceiling for nine months will bring stability to the market, and that Japanese and European demand should have recovered sufficiently by the end of the year to bolster the market.
But as stocks are rebuilt, supply will also become tighter and, despite French lobbying, the US is unlikely to allow Iraq to resume exporting, while the North Sea, one of the main sources of oversupply, will not sustain its current output level, according to an industry analyst.
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