December 12, 2018 / 1:28 PM / 7 months ago

OPEC needs to cut output by 700,000 bpd more for Brent to hit $70 - Rystad

Dec 12 (Reuters) - Oil producer cartel OPEC and its partners will need to keep production lower than their agreed target through 2019 for benchmark Brent crude to come back to $70 a barrel, oil and gas consultancy Rystad Energy said.

Last week, the Organisation of the Petroleum Exporting Countries and its Russia-led allies agreed to slash oil production by a bigger-than-expected 1.2 million barrels per day (bpd).

The producer group needs to stay 700,000 bpd below its agreed target of 31.8 million bpd through 2019 in order to bring a recovery in benchmark Brent crude prices to the $70 per barrel level, Rystad analyst Bjornar Tonhaugen said in a note.

“The agreed production cuts will not be enough to ensure sustained and immediate recovery in oil prices,” Tonhaugen said.

Crude prices have see-sawed of late on worries of a global economic slowdown on one hand, and a boost from production cuts on the other.

Brent crude futures, currently trading at just over $61 a barrel, have lost nearly a third of their value since reaching a four-year high of $86.74 in early October. (Reporting by Debroop Roy in Bengaluru; Editing by Maju Samuel)

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