Oil Prices Fall on Doubts Over OPEC Production Cut

Non-OPEC oil production giant Russian Federation confirmed on Tuesday that it would not attend the OPEC gathering, but added that a meeting between the group and non-affiliated producers at a later stage was possible.

Iran’s Oil Minister Bijan Zangeneh said the country will not cut oil production.

But Iran and Iraq were resisting pressure from Saudi Arabia to curtail oil production, making it hard for OPEC to reach an agreement.

Oil prices declined last Friday after Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries (OPEC), said it is withdrawing from the cartel’s upcoming meeting.

Razaqzada said that should OPEC come to an agreement, then oil prices would likely rise above $50 per barrel, and if the group failed to agree anything, prices would fall towards, though unlikely below, $40 per barrel.

Brent crude futures fell 2% first thing, although they regained some of the losses to trade down 49 cents, or 1%, at $46.75 per barrel.

If we don’t get a deal, Saudi Arabia would be one of the biggest losers, Kennedy noted.

According to data collected by S&P Global Platts, Iranian production rose to 3.67 million bpd in October. The oil market is experiencing extreme volatility compared to a week ago, with investors increasing their bearish bets on the energy commodity.

Over the weekend, Saudi Arabia’s oil minister Khalid al-Falih stated that inventory curbs may not be necessary, justifying this by saying oil prices will stabilize in year 2017 even without an interpolation from the OPEC.

The overnight deficit was erased after Iraq’s oil minister said Monday he was optimistic about a formal arrangement emerging from Vienna later this week when parties to the proposal sit down for actual negotiations.

OPEC in September agreed to cut production to lower the oversupply globally of oil but left out the details of what country cuts what and how much, until the meeting on Wednesday.

Oil prices dip over scepticism ahead of OPEC meeting was posted in Business of TheNews International – https://www.thenews.com.pk on November 29, 2016 and was last updated on November 29, 2016.

Oil ministers from OPEC members Algeria and Venezuela travelled to Moscow on Tuesday to try to persuade non-OPEC Russia to take part in cuts instead of merely freezing output, which has reached new highs in the past year.

The best possible result, at this stage, was that the club would end up with a face-saving deal while “kicking the can to the next OPEC meeting in half a year’s time”, Schieldrop said.