The latest oil and gas news may come as a surprise to oil and gas contractors and oil producers. In an effort to boost the oil price, Saudi Arabia announced that it will reduce production further in 2017. The announcement was made after it came to a deal with non-OPEC oil-producing countries, including Russia. The non-OPEC nations have pledged to reduce their production in the coming year.

This is the first agreement since 2001 between the Organisation of Petroleum Exporting Countries (OPEC) and the non-OPEC countries. It appears to be a concerted effort to regain control of the world’s oil market after oversupply and vast inventories have caused the oil price to plunge.

London-based Energy Aspects Ltd stated that the announcement by Saudi Arabia has surprised everyone in the industry, but it has demonstrated that the largest oil-producing nation in the world was willing to take measures to bring some semblance of balance to the oil market. Energy Aspects Chief Oil Analyst Amrita Sen said that the announcement by Saudi Arabia should do away with any doubt regarding OPEC following through on the deal.

On 30th November, OPEC announced that it would be reducing oil output, the first reduction in production in the last eight years. This helped oil prices to increase by 15 per cent, and for a short while the price per barrel rose above $55. This increase was instrumental in causing a surge in the share prices of oil and gas companies such as Exxon Mobil. Even shale gas producers such as Continental Resources saw their share price rise.

Saudi Arabia Oil Minister Khalid Al-Falih stated that starting 1st January, the country will reduce its output below the level it had committed to on 30th November. The level agreed on 30th November was 10.06 MMbpd. The reduction came after the non-OPEC nations committed to reducing their output by 558,000 barrels per day.