Oil prices surpass $50 as OPEC meeting starts

By Zeynep Beyza Kilic

ISTANBUL

Brent oil price surpassed $50 for the first time in a month, influenced by anticipation surrounding OPEC's meeting in Vienna on Wednesday.

International benchmark Brent crude oil increased by 5.71 percent to $50.02 while U.S. WTI jumped by 5.53 percent to $47.73 at 09.35 GMT on Wednesday.

Brent had seen $50.58 back in Oct. 28 and fell slowly down to as low as $43.57 on Nov. 14.

The 14 member group agreed to lower oil output down to a range between 32.5 and 33 million barrels per day in late September.

All eyes are now on the 171st Ordinary OPEC Meeting as the cartel is expected to outline the details of the deal to cut production.

Individual country quotas and countries exempt from the deal will be determined during the meeting.

Since the initial agreement on Sept. 28, Libya, Nigeria, Iran and Iraq asked to be exempt or receive special status from output cuts, each citing economic reasons why they should be allowed to continue or build on their production levels.

The group's decision to cut is based on the desire to raise oil prices and lower excess supply in the market.

“OPEC fully appreciates the importance of bringing forward the rebalancing of the fundamentals and returning sustainable stability to the market,” said Mohammed Bin Saleh Al-Sada, president of the OPEC Conference during his opening speech.

“This will be beneficial to our economies, the global oil market and the world economy as a whole,” Al-Sada added.

He underlined the importance of not only considering the short-term, but the medium- and long-term as well.

“Of course, the short-term directs our current thinking, but as we all know, this is very much a medium- to long-term business,” he said, giving the market hope towards a more long lasting outcome from the meeting and OPEC’s moves after the meeting.

Leading up to the meeting in Vienna, OPEC Secretary General Mohammad Sanusi Barkindo met with high level representatives from several member countries in a bid to establish good relations.

Barkindo met with Iran’s Minister of Petroleum, the President of Ecuador, the President of Venezuela and the Emir of Kuwait in November.

Aside from determining OPEC production levels, the cartel is asking major non-member countries, like Russia, to reduce output as well.