A final statement from OPEC said that since its December meeting “crude oil prices have risen by more than 80 percent, supply and demand is converging and oil and producer stock levels in the OECD (industrial economies) have recently shown moderation”.
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Oil prices also drew support from further signs of falling U.S. shale output, with Thursday’s data from the U.S. Energy Information Administration showing a further decline in production last week. OPEC had an official production ceiling of 30 million barrels a day, but member countries effectively abandoned the cap in December as they boosted production and fed the global crude glut. US crude oil for July delivery settled up 16 cents, or 0.3%, at $49.17 a barrel on the New York Mercantile Exchange.
Brent crude oil futures were down 54 cents, or 1 percent, at $49.18 a barrel by 10:05 a.m. EDT (1405 GMT), after touching an intraday low of $48.84.
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But in the most recent drop, tumbling from over $100 in 2014 to close to $25 in January, OPEC – driven by Riyadh – has changed tack, keeping oil flowing to maintain market share and squeeze competitors.
It is expected the participants formulate the OPEC policy for next six months, discuss the situation of oil market and elect a new secretary general for the organization.
That could address Iranian resistance to curbing its output.
“We will be very gentle in our approach and make sure we don’t shock the market in anyway”, Saudi Arabian Energy Minister Khalid Al-Falih told reporters after the meeting.
Oil prices fell Thursday on news of the failed deal.
“I said that the ceiling [limiting of oil production by OPEC members] without country quotas does not mean anything, and OPEC itself without country quotas is nothing”. Iran, now free of Western economic sanctions, set out to revive its oil industry and raise production by at least a million barrels a day. Crude oil is at 49.15 fighting a strong United States dollar while Brent oil has been able to remain over the $50 price.
Meeting started work in Vienna on Thursday.
Analysts still took away positive aspects from the meeting in Vienna, as Saudi Arabia showed restraint.
Jason Schenker, president and chief economist of market research firm Prestige Economics, said the strategy of OPEC and the low oil price have influenced U.S. Shell oil, making many companies cut job positions and earn less profit.
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Mohammed Sanusi Barkindo from Nigeria was appointed as new secretary general of the organization and is to take the office on August 1.
