OPEC members Saudi Arabia, Qatar and Venezuela, as well as non-OPEC producer Russia, have at last decided to keep production at January levels.

“Freezing now at the January level is adequate for the market. The producers don’t want significant gyrations in prices, we want to meet demand. We want a stable oil price,” Ali Al-Naimi Saudi’s Oil Minister said.

Although the production freeze is not the cut that had been intended, it signifies a positive move past Russia and Saudi Arabia’s earlier unwillingness to limit supply.

“The agreement is the first supply management decision taken since November 2014, so even though there will be some [who] will try to discount it and say it’s not a cut, it’s a change. It’s a big change in policy,” Olivier Jakob Petromatrix strategist said.

According to The New Economy, despite the fact that the freeze indicates that supply will not rise any more, production for a lot of producers is by this time close to record levels. Russia produced nearly 10.9m bpd in January while Saudi Arabia produced 10.2m bpd compared to the 10.5m Saudi Arabia managed in 2015, it is still high thereby making it doubtful Saudis would have boosted production much more without the freeze.

Anita Fatunji