OPEC has agreed on a deal on Tuesday by reassuring consumer countries about energy supply security and by offering up its remaining spare production capacity. The treaty means that the 11- member Organization of the Petroleum Exporting Countries is putting its last 2 million barrels a day of spare crude on the block for world oil markets. The treaty leaves the groups official output limit unaltered at 28m barrels a day because ministers say global refining capacity is at full stretch and unable to process more crude.
Libyan energy minister Fathi Omar Bin Shatwan communicated that " It seems nobody will buy it because the market is well supplied. Hurricane Rita headed for US Gulf oil facilities and because of which there appears little the 11- member group can do to control oil prices , that blew $4 higher on Monday by the new storm with the name mentioned above. Market analyst say that the market is well supplied with OPEC oil but Opec had come under pressure from EU finance ministers to immediately thrust more crude oil on to a market despite refinery bottlenecks that limits processing capability for transport fuels.
After Hurricane Katrina by less than a month supply disruptions were more threatened as this fresh storm headed towards the Gulf of Mexico and because of that in mean time ,oil fell back towards $66 on Tuesday billowing seven 7% the previous session. If the storm causes major disruption to supplies the International Energy Agency said it would consider extending its 30-day oil rescue plan to the US. London Brent crude was down $1.3 at $ 64.3 , after leaping $3.8 on Monday.Light crude hit a record $70.85 on August 30, a day after Katrina struck. US light crude traded down$1.4 to $66 a barrel, after surging $4.4 on Monday. Saudi oil minister Ali al - Naimi said, Forecasts showed Rita set to enter the Gulf of Mexico, which accounts for about a third of domestic oil production, then make landfall this weekend in Texas, home to about a quarter of countrys refining production. The cartels agreement offering up the groups remaining 2 million bpd of spare production capacity permitted individual member countries to pump at will to meet consumer demand. Analysts confirmed that the outcome of the move would be limited.