“There was consensus that market fundamentals are working and there wasn’t pressure on OPEC to think about influencing supply and demand”. Some oil producers had proposed the cap as a way to restrain rising output that has weighed down prices in the last two years and battered energy-dependent economies.
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They say the recent price recovery has been due to one-off factors, such as the effect of Canada’s wildfires and a Kuwaiti strike on production – not by OPEC’s strategy.
But the OPEC summit wasn’t without a bit of drama.
The change in tone from Saudi Arabia, may reflect the need of new oil minister Khalid Al-Falih, who was appointed to the position last month, to start his tenure with a successful meeting, Bloomberg said.
“Iran supports OPEC’s efforts to bring stability to the market with fair and logical prices, but it will not commit to any output freeze”, Iran’s representative to OPEC, Mehdi Asali, was quoted as saying by Iranian oil ministry news agency Shana. That would have been down from 32.77 million barrels now.
Moreover, data showed gasoline stocks fell by 1.5 million barrels, while distillate fuel inventories were down 1.3 million barrels.
Today, OPEC members will discuss the appointment of Nigerian candidate Mohammed Barkind to the secretary general seat, to replace Libyan Abdallla Salem el-Badri.
“The Conference considered Gabon’s request to rejoin the Organization, and made a decision to approve its admission with effect from 1st July 2016”, the statement read.
Higher oil prices will be greeted by groans from many American drivers.
The organization should help stabilize the market and also be able to manage the situation when markets get unbalanced, he said.
OPEC said in a statement that it was committed to “a stable and balanced oil market, with prices at levels that are suitable for both producers and consumers”. As of March, U.S. oil production is down by roughly 500,000 barrels per day from the April 2015 peak.
The oil market has slumped from over $100 in 2014 to close to $25 in July, hit by a chronic global supply glut and OPEC’s refusal past year to curb production.
“Contrary to market speculation, Saudi Arabia is open to cooperation”, Sen said in a report, according to Bloomberg.
“We’ve seen that the worst is over”.
Oil prices fell Thursday on news of the failed deal.
Yet it’s clear that tensions still exist within OPEC.
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“Iran is not interested in formally participating in any supply-limiting scheme until it has reached it pre-sanctions level and the Iranian oil minister repeated the same late yesterday when arriving in Vienna”, noted Petromatrix analyst Olivier Jakob.
