Venezuela sees oil output deal cutting 1.2 MMbpd

CARACAS (Bloomberg) -- An agreement among OPEC and non-OPEC states to limit oil production could slash global supply by 1.2 MMbpd and add as much as $15 to prices, said Venezuelan Oil Minister Eulogio Del Pino.

Members of the Organization of Petroleum Exporting Countries would collectively cut output by 700,000 bopd under the accord hashed out last week in Algiers, Del Pino said in an emailed statement. Non-OPEC states would reduce production by another 500,000 bopd, he said.

OPEC output rose to a record 33.75 MMbopd in September, according to a Bloomberg survey. The 170,000-bopd increase from the previous month was driven by the return of production from Libya and Nigeria. Those countries, along with Iran, will likely be exempt from the deal reached last week in Algiers.

The deal will boost oil prices by $10 to $15 above the average September price, Del Pino said. The accord will remain in effect for six months before group members assess market conditions, he said.

Stung by low prices that shrank national budgets, eroded foreign reserves and triggered currency crises, OPEC members unexpectedly agreed last week to halt a two-year policy of producing crude at will. Non-OPEC nations discussing output curbs with Venezuela include Russia and Azerbaijan, Del Pino said on Tuesday.