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Bullish Deal

The United Arab Emirates and Kuwait will reduce output by 139,000 barrels a day and 131,000 a day respectively, the document shows. Non-member Russia, also pumping at a post-Soviet record, will cut by as much as 300,000 barrels a day “conditional on its technical abilities,” Energy Minister Alexander Novak said in Moscow.

“What was announced so far is bullish, but January is still far away,” said Giovanni Staunovo, an analyst at UBS Group AG. “December will still see ongoing record production, but market participants might ignore it. It does seem as though Russia will cut, which if implemented is also positive.”

Russia, the biggest producer outside the bloc, had previously resisted calls to trim its production, insisting it would only consider a freeze. OPEC plans to hold talks with non-0PEC producers next week in Doha.

The strength of the deal will depend on whether all parties deliver on their commitment. Saudi Arabia and its Gulf allies the U.A.E. and Kuwait have traditionally stuck to their cuts, but some others haven’t, particularly when prices are low. Any doubt in the market could once again see prices come under pressure.

The last two years have been painful for OPEC: The group will earn $341 billion from oil exports this year, according to the U.S. Energy Information Administration. That’s down from $753 billion in 2014 before prices crashed, and a record $920 billion in 2012.

The group will meet again on May 25 next year, at which point it intends to extend the cuts by another six months, Qatari Energy Minister Mohammed Al Sada told reporters in Vienna.

Indonesia requested a freeze of its OPEC membership. Its suspension won’t affect the size of the group’s production cut, one delegate said.