Mr Novak said the agreement, which might include attempts to limit oil output, was a “historical moment” between members of Opec, the oil producers’ cartel, and non-members such as Russian Federation. The recent oil price slump has impacted breakbulk operators worldwide as a result of cancellation and delays in construction of major oil production projects.
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“We saw excitement [in the markets] that this might be a concrete prelude to a production freeze to be announced” at the OPEC meeting later this month, Michael Ingram said Tuesday.
Several OPEC producers have called for an output freeze to rein in the glut, which arose as supplies from high-cost producers such as the United States soared.
Slower second quarter growth in the European economy, coupled with a more measured look at production rumors, brought oil prices lower early Tuesday.
“While the short-term gains from freeze deal speculations have been impressive, the commodity remains pressured with further losses expected if September’s informal OPEC meeting concludes without an effective deal”, Otunuga added. OPEC and Russian Federation tried earlier this year to curb the glut by seeking an output freeze, but the deal collapsed in April due to tension between Saudi Arabia and Iran. The previous attempt at reaching a deal in April was wrecked by refusal from Iran – OPEC member – to agree to any output freeze.
Brent crude for November slipped 28 cents at $47.35 a barrel, while USA crude for October was at $44.96, up 52 cents, Reuters reported.
Iran has supported production cuts; however it has showed resistance when it comes to freezing production. Bidness Etc believes crude prices would hover in the $45-50 per barrel range, unless significant factors underpinning the rout begin to level off.
Its total production has risen from 2.7 million bpd to 3.85 million bpd, close to the level before worldwide sanctions were imposed in 2012.
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OPEC supplies about 40 per cent of the world’s oil pumping 32.5 million barrels per day. The U.S. Energy Information Administration, meanwhile, reported a larger-than-expected increase in U.S. crude oil stockpiles. Even when the prices continue to extend their declines, Nigeria, Libya, and Iran are aiming to produce at 2 million barrels per day.
