OPEC output rises, complicating cartel’s price-boosting plan

Oil fell nearly 2% on Tuesday, retreating from one-year highs, after mixed responses by Russian oil industry officials toward an OPEC call for all major crude producers to cut output.

OPEC’s most senior official talked up Russia’s commitment to joining efforts to limit oil production even as the group’s internal disagreements over how to share the burden of cuts stood in the way of a global deal. “We intend to expand it to get the feelings of as many non-Opec countries as possible”, al-Sada said.

It follows a modest cut in production from last month’s meeting in Algeria and an energy summit in Turkey.

Crude oil (WTI) was decreasing 1.4% to $50.08 per barrel and Brent crude was slumping 1.16% to $51.80 per barrel this afternoon.

OPEC said Wednesday it was inviting Russian Federation and other key non-members to a meeting later this month as the oil cartel and Moscow seek to tighten cooperation to boost historically low crude prices. Iraq said it pumped 4.78 million barrels a day.

The 14 Opec member countries have preliminarily agreed to cut their collective production to between 32.5 and 33 million barrels per day, with a final agreement on who cuts what to be hammered out at its next formal gathering in November. Leonid Fedun, vice president of Russia’s second-largest producer, Lukoil PJSC, said the nation’s oil companies will unify behind their government if talks with OPEC result in an agreement.

In the summer of 2014, oil was trading above $100 a barrel, but increased output from non-OPEC countries, particularly the United States, created an oversupply.

No specific production figures were discussed during Wednesday’s meeting but more details will likely be discussed at the technical meeting in Vienna, Russian Energy Minister Alexander Novak said. The basket price slipped $0.21 to $42.89 a barrel, down almost $3 a barrel from a recent high of $45.84 in June.

Saudi Arabia and other producers are unlikely to cut and higher prices would only bring USA shale producers back into the market, Sechin said.

On Tuesday the International Energy Agency (IEA) said OPEC raised its production by 160,000 barrels per day in September to a record 33.64 million.

Oil imports hit a record despite a worse-than-expected 10 per cent fall in Chinese exports and a 1.9 per cent drop in imports that cast a gloomy outlook on its economy.

OPEC made no change to the global oil demand outlook, predicting demand growth of 1.15 million bpd in 2017.