OPEC set for policy rollover, no sign of Saudi cut plan

“As this would simply acknowledge the reclassification of Indonesian output from non-OPEC to OPEC production, it would not amount to an increase in overall global supply”, Jessop said in a report obtained by Trend.

All eyes were turned toward a few major events in December: Expectations of an interest rate hike at the US Federal Reserve meeting on Dec. 15 to 16; Organization of Petroleum Exporting Countries (OPEC) ministers meeting in Vienna Dec. 4 to agree to do nothing about the global supply glut; and the climate change talks in Paris from November 30 to Dec. 11, which could have longer term implications for fossil fuels.

“News yesterday that Saudi Arabia lowered their offer prices into the United States supports the view that Saudi Arabia has no intention of cutting output and relinquishing any market share”, ANZ bank said on Friday.

“China’s implied oil demand growth… grew at 3.8 percent year-on-year in October (407,000 barrels per day), an improvement relative to the 226,000 barrels per day growth in September”, Barclays said.

Analysts said, however, that the rise was likely to be short-lived as the oil cartel is expected to maintain current high output levels favoured by influential members such as Saudi Arabia and other Gulf states.

Based in Canada, Encana, engages in the development, exploration, production, and marketing of natural gas, oil, and natural gas liquids in Canada and the U.S. Non-Opec member Russian Federation said it saw no need for Moscow to cut oil production.

Iran’s oil minister was quick to dismiss the possibility of limiting Tehran’s production ramp-up once Western sanctions are lifted.

At the New York Mercantile Exchange, the WTI’s contracts for January 2016 climbed 0.73 percent to US$41.38 per barrel from Thursday’s US$41.08 per barrel, which was 2.85 closing gain.

Oil strategists and government officials from the 12 OPEC nations met in an informal gathering at a hotel in the Austrian capital city, a day ahead of the group’s official meeting.

To make room for the return of Indonesia, OPEC could actually raise its 30 million barrel per day quota, which it has been surpassing. “OPEC members are among countries that provide additional supplies to market, in particular Saudi Arabia, which in the past year has significantly raised output levels”.

Cushioned by past profits on oil, the Saudis can hold out, even if production costs exceed sale revenues.

With oil prices hovering near a six-year low, cash-strapped countries including Venezuela, Ecuador and Algeria are pressuring Saudi Arabia to cut production. The surge surprised analysts, who said some traders were probably hedging against a possible surprise at the OPEC meeting.