Most important OPEC meeting in 40 years is expected

Bouterfa said Algeria’s proposals called for 1.1 million barrels per day (bpd) in cuts by OPEC members and decreases totalling 600,000 bpd by non-members, SHANA reported.

One of the biggest OPEC concerns is that by cutting output it would simply hand over market share to non-OPEC competition. 5 million barrels a day, is to take effect in January, said OPEC President Mohammed Bin Saleh Al-Sada.

He also said Russian Federation was ready to reduce production.

“There is an official letter from (Saudi Arabia) saying (it is) not attending the meeting because the ministers should agree to the cut and then present the agreement to non-Opec countries”, an Opec source said.

Those two countries are still insisting they are excluded from any supply cut quotas given they are still in the final stages of getting back to somewhere near full pumping capacity.

The proposed arrangement came with casualties as sources indicated early Wednesday that Indonesia was suspended from OPEC after rejoining the group early this year. Prices tumbled 3.9 percent on Tuesday when skepticism swelled that a deal would get done. It could also restore some authority to OPEC as an arbiter of prices and supplies after years of inaction.

Beyond the planned output cut, Morgan Stanley said that the firm US-dollar was the strongest oil price driver.

The EIA (U.S. Energy Information Administration) estimates that US WTI crude oil prices will average $46 per barrel in November 2016 and December 2016.

The result was that oil fell to below $30 in January for the first time in over a decade. RM205.3) a barrel amid scepticism over Opec’s ability to reach an agreement to cut output as representatives meet today amid last-minute negotiations to reach a deal.

After a cut is announced, sellers could emerge as oil rallies toward $52 a barrel, he said.

Iran and Iraq are resisting pressure from Saudi Arabia to curtail production, making it hard for the group to reach a deal.

And Iraq, which is fighting an expensive war against Islamic State, is reluctant to play a part in any output cut and it is feared it will honour it in the breach by maintaining production.

Saudi Arabia is Opec’s biggest oil producer and its economy has been among the worst hit by the collapse of oil prices starting in the summer of 2014.

Libya ramped up production to over half a million barrels a day in October – but that’s still just a third compared to the 1.6 million it pumped in June 2010 prior to the Arab Spring revolution in the Middle East.