EASING OIL PRICES
OPEC is hinting it may boost supply in an effort to alleviate high costs for consumers,
Saudi Arabia’s oil minister said it’s “inevitable” that OPEC and its allies will agree to boost oil output gradually, giving the most definitive signal yet that the cartel will alleviate high prices for consumers.
“I think we’ll come to an agreement that satisfies, most importantly, the market,” Khalid Al-Falih told reporters Thursday in Moscow, when asked about the outcome of the meeting between the Organization of Petroleum Exporting Countries (OPEC) and its allies in Vienna next week. “I think it will be a reasonable and moderate agreement” but nothing “outlandish,” he said.
Russia and Saudi Arabia, leaders of the deal that curbed crude output and boosted prices to three-year highs, were set to discuss their next move in Moscow on Thursday as the two nations faced off in the soccer World Cup. They face pressure, not least from the Twitter account of U.S. President Donald Trump, to increase supply to offset disruptions caused by the economic crisis in Venezuela and renewed American sanc- tions on Iran.
For Al-Falih, the assertion of inevitability is a gamble on his ability to persuade those two nations to drop their opposition to an output increase in face-to-face meetings in the Austrian capital next week. Caracas and Tehran have been adamant that OPEC doesn’t need to boost production this year, and have warned against responding to political pressure from Washington.
“The Trump administration is trying to intervene in the affairs of a sovereign organization,” Hossein Kazempour Ardebili, the most senior Iranian official at OPEC meetings after the oil minister, said Wednesday.
Iraq said the group should resist pressure to increase oil supplies because its curbs haven’t yet achieved their purpose, with crude prices below the desired level.
Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman, along with Al-Falih and his Russian counterpart Alexander Novak, were to discuss how to boost oil production while maintaining their petro-alliance and overcoming opposition.