More nations agree to cut oil production
Eleven more oil producing nations have agreed to cut their production to try to boost global crude oil prices.
The deal follows an announcement by OPEC 11 days ago that its members would collectively cut production by just over 1 million barrels a day.
Now 11 nations, led by Russia, have said they will cut production by 558,000 barrels a day, in the first agreement between OPEC and non-member nations in 15 years.
The non-OPEC nations include Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan and South Sudan.
The OPEC countries include Algeria, Angola, Ecuador, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.
Collectively they produce around 60 percent of the world's crude oil.
The agreement to cut production does not involve the US, China, Canada, Norway or Brazil.
Crude oil prices have risen 15 percent since the OPEC deal was first announced, with West Texas crude rising from around US$46 a barrel to US$54 a barrel.
Here in New Zealand pump prices have risen by 7 cents since the start of the month.
The standard national price for diesel is just under $1.29 per litre, while Unleaded 91 is just under $1.99 per litre.
Pump prices here aren't just affected by crude prices. The price of refined oil, the New Zealand dollar, taxes and importer margins all play a role.
Prices increased by 2 cents on December 8 and the AA questioned the most recent increase.
"The AA's monitoring of commodity prices and exchange rates show no deterioration since last week, when prices rose a total of 5 cents per litre in two days," it said.
"As a result of last week's increases, margins rose back to the normal range so another increase was not warranted in our view."
The agreement by the non-OPEC nations is likely to help stabilise crude prices. OPEC would like to see crude prices rise closer to US$60.
But the production cut will also be a boost to the US's shale producers. Rising prices will help some of those companies return to profitability and might encourage an increase in production.
There are also doubts about how many of the nations that have agreed to cut production will reduce output by the amount that each nation has promised.