Poorer OPEC members like Nigeria and Ecuador have been clamouring for a cut in production in a bid to stabilise prices, which have plunged to near 13-year lows this month.
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Opec secretary-general Abdullah el-Badri reiterated the group’s readiness to work with nonOpec producers to tackle a supply glut that has knocked prices to their lowest in more than a decade.
“Nigeria of course is likely to support such a freeze”. That gives two choices to Russian Federation; either to bear the high cost to maintain its market share or to reduce the output in its fields.
Iran increased production up to 3.37 mbd in January (from 3.35 mbd in December 2015), according to the latest OPEC report.
The two countries are OPEC’s second and third largest producers. “If I knew oil prices’ future, I would quit OPEC tomorrow”, he said.
The Saudi oil minister on Tuesday ruled out the prospect of production cuts by the Organization of the Petroleum Exporting Countries, saying that a production freeze is a more realistic possibility.
Iran has consistently signaled that it intends to ramp up production now that Western sanctions against crude exports have been lifted.
He said there are “other steps”, such as production cut to eliminate a persistent global oversupply.
This could be addressed during Buhari’s Saudi visit, Dembik said. Long term this will increase. Divisions over the conflict in Syria – where Saudi Arabia and Russian Federation back opposing sides – are also an obstacle.
“A freeze is the beginning of a process”.
“It is probable, then, that Nigeria meanwhile establishes a bridge for negotiations, notably between Riyadh and Tehran”. He put his money where his mouth is, pledging to cut 100,000 barrels a day, or about a 10th of the country’s output. “We’re as strong as we thought we were, but there were people who didn’t understand shale’s behavior versus a swing producer’s behavior”, Hess said. But during his visit to Riyadh, Buhari is expected to fly to Doha to discuss oil price stability with Qatar’s ruler.
Oil prices dipped in Asia Tuesday after mounting a strong rally the day before as traders remain doubtful that talks on an output freeze among key crude producers will lead to agreement.
West Texas Intermediate, the USA benchmark price for crude oil, was down about 0.5 percent to start the day at $33.21 per barrel.
U.S. S&P 500 Index .SPX fell 1.25 percent on Tuesday to 1,921.27, having failed to rise above its peak hit on Feb 1, with energy and material sectors being a major drag as oil prices quickly gave up Monday’s hefty gains.
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Prices have plunged from above $100 a barrel in early 2014.
