Sources told Reuters on Friday that Saudi Arabia did not expect a decision to be made in Algeria, while Saudi Arabia had also offered to reduce production if Iran caps its own output this year, an offer to which Tehran had yet to respond. urn:newsml:reuters.com:*:nL8N1BZ1Y1 ” With discussions around a production freeze at OPEC heating up, oil prices are likely to remain volatile early this week”, ANZ said in a note on Monday. Early flutters of optimism that the informal gathering could hammer out a deal to actually drain the surplus have yielded to scepticism.
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But oil prices slumped on Friday on signs that OPEC members Saudi Arabia and Iran were struggling to reach a preliminary consensus in the run-up to the Algeria talks.
“An agreement on a production freeze accepted by everyone would be a surprise”, said Didier Houssin, head of research group IFPEN.
Bouterfa urged both the OPEC and non-OPEC members to freeze production in a bid to stabilize the market. “Without binding measures, without specific quotas”. He called the situation “much more critical” than in January. The OPEC talks will take place on the sidelines of a three-day International Energy Forum gathering – in which Russian Federation will participate – from Monday.
Russian Federation and members of the OPEC oil cartel led by Saudi Arabia will gather in Algeria for three days from Monday and are expected to discuss a stubborn supply glut that has depressed prices since 2014. OPEC chief Mohammed Barkindo, of Nigeria, has himself dampened expectations, describing the meeting as consultative.
Iraq’s Oil Minister said his country supports any deal to prop up oil prices in the global market ahead of next week’s meeting of oil producers in Algeria, adding that fluctuating prices have badly affected the producers.
Saudi Arabia has over the past years increased production to a new historical record of 10.7 million barrels a day, overtaking Russian Federation and the United States as the world’s biggest producer, while Iran remains keen to ramp up its output following last year’s historic nuclear deal, which allowed the country to resume oil exports.
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Crude oil prices started trading in Asia lower and moved into mixed territory at the start of trading Friday in NY. So far there are mixed signals on whether a deal on cutting or freezing production is possible. Even so, the Saudi concession could founder on old rivalries.
