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OPEC gearing up for deeper oil cuts, Russia yet to agree





OPEC, Oil cuts, Russia

OPEC, Oil cuts, Russia
OPEC is gearing up to deepen oil supply cuts later this week but still needs to strike an agreement with allies such as Russia on details of a deal to support prices and prevent a glut next year.

The Organization of the Petroleum Exporting Countries (OPEC) meets on Thursday in Vienna followed by a meeting with Russia and others, a grouping known as OPEC+, on Friday.

OPEC+ has curbed supply since 2017 to counter booming output from the United States, which has become the world’s biggest producer.

Next year, rising production in other non-OPEC countries such as Brazil and Norway threaten to add to the glut.

OPEC’s actions in the past have angered U.S. President Donald Trump, who has repeatedly demanded OPEC’s de facto leader Saudi Arabia bring oil prices down if it wants Washington’s to provide Riyadh with military support against arch-rival Iran.

In the past few months Trump has said little on OPEC but that might change later in 2020 if oil and gasoline prices rise – a politically sensitive issue in the United States. Trump will seek re-election in November.

Washington’s ongoing trade dispute with China has also clouded the economic and therefore oil demand outlook for 2020.

OPEC’s second largest oil producer Iraq said on Tuesday Saudi Arabia was supporting deeper cuts for OPEC+ to 1.6 million barrels per day, or 1.6% of global demand, from the current level of 1.2 million bpd.

“My understanding is that they (Saudis) do (prefer it),” Iraqi Oil Minister Thamer Ghadhban said on Tuesday.

On Wednesday, Ghadhban said he would support at least extending existing cuts to end-2020 from March: “We have to give a positive signal to the market and to me at least we should roll-over present agreement”.

Oman’s oil minister Mohammed al-Rumhi said on Wednesday his delegation would recommend extending cuts until the end of 2020.

Saudi Energy Minister Prince Abdulaziz bin Salman declined to comment on policy matters upon arrival in Vienna.

“It will be easy,” said Venezuelan Oil Minister Manuel Quevedo when asked about prospects for the talks, adding that a rollover of the current deal was likely.

Source: Reuters

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Chuka (Webby) Aniemeka
Chuka (Webby) Aniemeka

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