Saudis offer oil cut for OPEC deal if Iran freezes output

Producers shouldn’t make a hasty decision and the meeting in Algiers is for consultation, not an official session of OPEC, Energy Minister Suhail Al Mazrouei told reporters in the emirate of Fujairah Wednesday.

OPEC members will meet between 26-28 September on the sidelines of the International Energy Forum, which groups producers and consumers.

Oil futures started the day in negative territory as investors held little hope of a breakthrough to prop up prices at talks held by members of OPEC in Algeria next week.

The two oil producers, along with fellow OPEC member Qatar, met at the headquarters of the Organization of Petroleum Exporting Countries in Vienna, according to three people familiar with the matter.

Also, “communications and cooperation between China and Russian Federation have improved, which indirectly contributed to the increase in oil imports”, Lin told the Global Times on Thursday.

A much-anticipated major oil price bump in the second half of the year has failed to materialise, confounding market observers including the International Energy Agency and most Wall Street banks. The IEA said before, the surplus in global oil markets will last for longer than previously thought, persisting into late 2017 as demand growth slumps and supply proves resilient.

“It baffles me that people still take those statements seriously”, said Tom Pugh, a commodities analyst at Capital Economics.

The S&P 500 capped its best two-day performance in more than two months, while the Nasdaq closed at a record high. And neither Libya and Nigeria, where production has been disrupted by unrest and violence, will be willing to accept current production as a ceiling. Most producers have already reached their maximum level and their largest share of the market.

From January to May, Saudi Arabia produced around 10.2 million barrels per day. The current oil glut has severely damaged Venezuela’s economy leading to food and medicine shortages.

Oil prices plunged from peaks of more than $100 a barrel in mid-2014 to near 13-year lows below $30 in February as supply outpaced demand.

Algeria’s oil minister said this week supply should be reduced by at least one million bpd.

With Iran having restored lost output since worldwide sanctions were lifted in January, the chances of a deal now are higher than at any time since OPEC launched its strategy two years ago, according to Jamie Webster, a fellow at the Center on Global Energy Policy at Columbia University in NY. However, experts are speculating that oil could breakout above $50 per barrel if OPEC reaches a consensus to reduce oil prices. But low oil prices and the Islamic State incursion have combined to crimp investment in the country’s oil industry and left the government struggling to pay the foreign oil companies, which operate the oil fields as contractors, for a fee.