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"The size and nature of the cut agreed by OPEC+ supports our price outlook for 2019. The headline number fell slightly short of our expectations (1.26 million b/d). In some ways, though, the cut was more substantial than we were anticipating. Crucially, it excludes Iran, Libya and Venezuela. Mismanagement and chronic underinvestment has driven Venezuelan production into heavy decline, with output falling by more than 550,000 b/d over January to November," the company said.

Fitch Solutions believes that ongoing cohesion within the group will be key to maintaining a floor under Brent.

"Questions continue to be asked over the role and relevance of OPEC, with Qatar’s decision to exit the group adding further fuel to the fire. In our view, that decision is better viewed through the lens of Qatar’s strained relations with Saudi Arabia, its relative lack of influence within OPEC and its strategic focus on LNG," said the report.

OPEC and its collaboration with Russia has been one of the key factors driving prices higher over the last two years, according to the company.

Fitch Solutions expects believe that its decision to remove 1.2mn b/d of supply from the market has done little to move Brent back towards its early- October highs

"However, it has stabilized prices in the low-60s, following eight weeks of heavy selling pressure. Had the group OPEC+ not taken action, the downside to Brent would have been substantial, in our view. In putting a floor under the market, the group can maintain prices at a level that is fiscally acceptable to most members and can stimulate demand in emerging markets (EMs)," the report reads.

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