But the Saudis and their Gulf allies have been sticking to their strategy of defending market share – hoping that lower prices may ultimately drive higher cost producers such as United States shale firms out of the market. For producers outside OPEC, the pressure from low crude oil prices, expected to endure through 2016, means a contraction in oil supply is expected.
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The ministers of the Organization of the Petroleum Exporting Countries appeared to have little choice.
With the International Energy Agency predicting the nation will import 40 per cent of its oil needs by 2018, the world’s biggest producers are getting a consumer in their midst.
He said the downward trend stemmed mainly from the impact of investment cutbacks and the drop in U.S. tight oil output, which had been declining since May 2015.
Well, OPEC’s secretary general says there was no consensus on how much oil Iran will add to the market next year due to the pending lift of sanctions.
“Effectively it’s ceilingless”, Iranian Oil Minister Bijan Namdar Zanganeh said on Friday, after returning from the meeting with his OPEC counterparts.
“We have said on more than one occasion that we are willing to cooperate with anyone that will help balance the market… with us”, Saudi oil minister Ali al-Naimi told reporters gathered at OPEC headquarters in Vienna.
But Moscow repeated this week it saw no chance of joint action, and Iran and Iraq on Friday also showed no willingness to curb supply. The country has seen the fastest rise in crude production in the world this year.
World oil demand in 2015, he disclosed, grew by 1.5 million barrels per day, up from one million barrels per day in 2014.
Energy Intelligence had reported on Thursday Saudi Arabia was prepared to support a cut of 1 million bpd by OPEC if Iraq agreed to freeze output, Iran contributed and non OPEC members joined the cuts too. While that country’s production goes mostly for domestic consumption, the move could add to the total amount of OPEC barrels on sale.
A final OPEC statement was issued with no mention of a new production ceiling.
The Organization of the Petroleum Exporting Countries said Friday that it would keep producing oil at current levels, which are estimated to exceed 31 million barrels a day.
With benchmark U.S. West Texas Intermediate slipping more than 1 percent to below $40 a barrel, a psychological barrier may have been crossed, the bankers said.
Saudi Arabia said it didn’t feel obliged to cut production, which is running close to a record. But the desert kingdom remained opposed.
Near-record volumes have sent oil prices tumbling and OPEC seems to have done nothing to tackle overproduction.
Continental, North Dakota’s second-largest oil producer, famously cancelled its hedges last fall amid hopes prices would soon rebound.
Back on Nymex, petroleum-product futures took their cue from the losses in oil. Not so much some others.
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Nigeria’s oil minister and President of the OPEC Conference Emmanuel Ibe Kachikwu at a press con …
