Mohammed Barkindo, who was acting head of Opec in 2006, met ministers from Algeria, the United Arab Emirates (UAE), Kuwait, Venezuela, and Saudi Arabia in Vienna this week to garner support for his candidacy, according to a person familiar with the matter, who asked not to be identified because the talks were private.
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The Indian basket of crude oils, composed of 73 percent sour grade Dubai and Oman crudes and the rest by sweet grade UK Brent, closed on the previous trading day on Wednesday at $46.38 a barrel of 159 litres, after having fallen below $25 earlier in the year.
“The issue of output rationing can be discussed after the market stabilises”, Asali said. Crude oil is at 49.15 fighting a strong U.S. dollar while Brent oil has been able to remain over the $50 price.
OPEC is set for another showdown between rivals Saudi Arabia and Iran when it meets on Thursday, with Riyadh trying to revive coordinated action and set a formal oil output target but Tehran rejecting the idea.
Because of supply disruptions elsewhere, the Middle East’s low cost producers see little reason to restrain output as overall market conditions have improved significantly for them this year.
For decades, the oil cartel has been able to basically world oil prices due to its members controlling a large portion of supply.
But determination to break the sense of drift inside Opec is being undermined by the fact that market forces have driven up the value of benchmark Brent blend to about $50 per barrel.
At Opec’s last meeting in December, the feud over the group’s role in managing oil markets spilled over into the selection of its most senior official. He will replace current OPEC Secretary-General Abdalla Salem el-Badri. “And circumstances emerged that make it very hard for them to agree on pricing policy because of what has resulted from investments over the last decade”, Morse said, referring to shale-oil production from hydraulic fracturing. “OPEC members will be keeping a close eye on China, with the low factory activity data that has been released possibly signaling a diminishing demand for oil – something that could do real damage to oil prices”, said Mihir Kapadia, CEO at Sun Global Investments. “But at this time., the number that we are producing is reasonable to the market, the market is accepting it, prices are moving”.
But Al Falih seemed to offer a softer position than his predecessor, acknowledging that “every country has the sovereign right to manage its own oil production”.
Al Falih reiterated Saudi’s stance that Iran must be part of any future OPEC agreements to curb output.
BMI Research oil and gas analyst Peter Lee told AFP that prices did not move drastically owing to cautiousness.
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That “OPEC could not agree on a relatively benign deal which would have been constructive for price is a sign that political differences are undermining the organization”, said Gary Ross, founder of US -based PIRA consultancy.
