Energy Intelligence reported on Thursday that Saudi Arabia may propose an eventual one million-barrel-a-day cut, conditional on the participation of non-OPEC producers including Russian Federation.
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A Saudi source said later the report was “baseless” but declined further comment and a source at Energy Intelligence said it stood by its story. Iran is looking to boost its production once the Tehran sanctions are lifted. It is our right and no-one can limit us to do so.
The next decision point will come out of an OPEC meeting Friday.
“And we do not expect out colleagues in OPEC to put pressure on us…”
Numerous more responsible companies – you can tell which ones they are; they still trade above two bucks a share – had hedged production at some very high prices, including those before the price collapsed. “The price dropped 60% during in the past year”.
OPEC abandoned production quotas several years ago and most members have been producing as much as they want with no oversight in place to control the volumes. He noted that Iran is now offering more attractive contractual terms to oil majors in order to bring its production back to the pre-sanctions levels. “There’s no expectation for OPEC to take any action this week”. Faced with dismay among members unable to balance their books, de facto leader Saudi Arabia has adopted a conciliatory tone, promising to listen to all before a policy decision is made.
Iran will be upping its production next year when sanctions are expected to eased against the country.
“I will be meeting one-on-one with other OPEC ministers to try and see how we can at least get to delay Iran flooding the market with 1.5 million bpd”.
“We have no responsibility for the situation that is in the market”, Zanganeh said.
The big question as OPEC meets on December 4 is whether Saudi Arabia is ready to do a deal on oil production.
The price situation could worsen next year, when growth in global demand for crude is set to slow as the allure of cheap oil fades, the International Energy Agency said last month.
This could prove to be premature, as Saudi Arabia also wants “in return” is for the other OPEC countries to join it in reducing the production. The rest of the OPEC countries are feeling lots of pain from these low prices and are concerned about stability in their own regimes because of the price collapse. This oversupply is the main reason why global stockpiles of crude have continued to build despite prices halving since last June. Despite the perpetual appeals to reduce output and support oil prices, OPEC has been refusing to do so as the organization is trying to maintain its market share.
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Venezuela and Ecuador are calling for OPEC to cut output after their economies have been devastated by the tumbling price.
