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Organization
of the Petroleum Exporting Countries (OPEC) Secretary-General
Mohammed Barkindo (L) and Venezuela’s President Nicolas Maduro
speak during a cultural presentation after their meeting at
Miraflores Palace in Caracas, Venezuela November 16,
2016.
REUTERS/Carlos Garcia
Rawlins
VIENNA (Reuters) – OPEC was trying on Monday to
rescue a deal to limit oil output as tensions grew among the
producer group and non-OPEC member Russia, with top
exporter Saudi Arabia saying markets would rebalance even without
an agreement.
OPEC experts started a meeting in Vienna at 0900 GMT
(4:00 a.m. ET) and were due to make recommendations to their
ministers on how exactly the Organization of the Petroleum
Exporting Countries should reduce production when it meets on
Nov. 30.
Meanwhile, the Algerian and Venezuelan oil ministers were to
travel to Moscow on Monday and Tuesday in a final attempt to
persuade Russia to take part in cuts instead of merely freezing
output, which has reached new highs in the past year.
In September, OPEC, which accounts for a third of
global oil production, agreed to cap output at around 32.5-33.0
million barrels per day versus the current 33.64 million bpd to
prop up oil prices, which have more than halved since mid-2014.
The meeting on Nov. 30 was expected to rubber-stamp that deal,
with Russia and some other non-OPEC producers such
as Azerbaijan and Kazakhstan also contributing.
But doubts emerged in recent weeks as OPEC‘s No.2
and 3 producers, Iraq and Iran, expressed reservations about the
mechanics of output reductions and Saudi Arabia voiced concern
about Russia’s willingness to cut.
On Friday, OPEC canceled an experts meeting with
non-OPEC producers scheduled for Nov. 28 after Saudi
Arabia said the organization needed to sort out its differences
first.
Over the weekend, Saudi Energy Minister Khalid al-Falih said oil
markets would rebalance even without an output-limiting pact.
That contrasted with his previous statements, in which he had
said Riyadh was keen for a deal.
Organization
of Petroleum Exporting Countries (OPEC) President, Qatar’s
Minister of Energy Mohammed bin Saleh al-Sada speaks with
Secretary General of OPEC Mohammed Sanusi Barkindo (R), during a
news conference after an informal meeting between members of the
organization in Algiers, Algeria September 28,
2016.
REUTERS/Ramzi
Boudina
«Nobody knows»
Doubts about OPEC‘s ability to deliver promised cuts
sent Brent crude down 2 percent initially on Monday to less than
$47 per barrel, though prices later recovered. [O/R]
Some analysts including Morgan Stanley and Macquarie have said
oil prices will correct sharply if OPEC fails to
reach a deal, potentially going as low as $35 per barrel.
As OPEC experts turned up at the group’s
headquarters on Monday, one delegate who had previously stated
that a deal would be done, said this time: «I am not sure.»
Another delegate, when asked about the prospects for a deal,
said: «Nobody knows yet».
OPEC ministers started arriving in Vienna on Sunday
for the group’s regular twice-yearly talks but Saudi Arabia’s
Falih was not expected to land before Tuesday evening, leaving
little time for traditional pre-meeting discussions with peers.
Iranian semi-official news agency MEHR published an editorial on
Sunday accusing Saudi Arabia of declaring a new «war on oil
prices» and reneging on its promises to limit output.
The tone contrasted with Iranian news agencies’ more upbeat
coverage of OPEC‘s informal meeting in September in
Algeria, when the initial deal was reached.
(Additional reporting by Ahmad Ghaddar and Vladimir Soldatkin;
Writing by Dmitry Zhdannikov; Editing by Dale Hudson)
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