OPEC’s talks with other producers to result in oil price rise

He noted that Iran and Iraq were determined to boost production, and were unlikely to come together with Saudi Arabia to cut OPEC output.

Stocks jumped at the open Thursday as the Dow rose more than 100 points and oil prices surged 6% to above $34 a barrel. Now that the oil producers have reached some kind of understanding after several months of suffering and loss of income on a daily basis, time has finally come for them to sit down and talk about reaching some kind of compromise regarding the level of production cuts particularly by the two big players Russian Federation which produces about 11.1 million barrels per day and Saudi Arabia which produces 10.5 million barrels daily.

The possibility of supply restraint by producers boosted oil prices to nearly $36 a barrel last week from a 12-year low close of $27.

“It is still early to talk about holding an OPEC emergency meeting, especially since the amount of crude that Iran would pump into the markets after lifting the sanctions is still unknown”.

The Organization of the Petroleum Exporting Countries is considering a request from cash-strapped Venezuela to hold an emergency meeting. The surge of the USA as a key oil producer has unsettled the OPEC centric world view when it comes to oil production and over-supply driven by unbridled shale oil production, among other factors, is likely to keep prices languished, though a minority among oil watchers may not be surprised if prices surge back to $50-60 a barrel by the end of the year.

The kingdom will have to raise taxes, slash resident perks and cut lavish spending to offset plunging oil profits, the fund has forecast. Some 5% cuts in oil output in both countries would total 1 million barrels of supply reduction.

The impasse has left some oil-industry producers seething at Saudi Arabia.

“The Saudis are now snared in a trap they set to other petrostates”, he wrote.

That should leave gasoline below $2 a gallon until the USA summer driving season nudges it to about $2.40, says Tom Kloza, chief global analyst of the Oil Price Information Service.

“OPEC summit talk is being denied a little bit”, Flynn said.

Despite the second round of announcements likely nullifying the chances of a Russia-OPEC deal, global oil prices continued to climb.

OPEC delegates said last week a gathering of OPEC and non-OPEC oil officials could take place in February or March, perhaps at an expert rather than ministerial level.

Iranian Oil Minister Bijan Zanganeh, attending a Franco-Iranian summit in Paris on Thursday, said Iran had not been contacted by Russian Federation about any cuts in output.