Opec seeks to build momentum for plan
> Cartel to invite more non-members to talks after informal meeting with Russia, Mexico
ISTANBUL: The Organisation of Petroleum Exporting Countries (Opec) sought yesterday to build momentum for its plan to cap global oil production, saying it will extend invitations to more non-member producers after holding informal talks with Russia and Mexico here.
Representatives of Opec and nonOpec countries will hold a technical meeting on Oct 28-29 in Vienna to continue to discuss “a roadmap” towards an agreement, Qatar’s Energy Minister Mohammed al-Sada told reporters after the meeting on the sidelines of the World Energy Congress here.
It was unclear which other countries would join the initiative.
No specific production figures were discussed during yesterday’s meeting but more details will likely be discussed at the technical meeting in Vienna, Russian Energy Minister Alexander Novak said.
Russian President Vladimir Putin said yesterday he saw no obstacles to a global agreement on an oil output freeze.
Opec last month in Algiers agreed on a modest production cap to a range of 32.50-33.0 million barrels per day (bpd).
Al-Sada said there had been a positive understanding of the situation on what could be the role of Opec and what could be the role of non-Opec” in balancing the oil market.
The International Energy Agency said global oil supply could fall in line with demand more quickly if Opec and Russia agree to a steep enough cut in production, but it is unclear how rapidly this might happen.
Any deal would face challenges from a 3 billion barrel global inventory build in recent years as well as efforts by Opec members Libya and Nigeria to increase production curtailed by conflict.
Iran is also seeking to return its production to levels reached before it was hit by international sanctions in 2012.
Meanwhile, oil prices fell about 1% yesterday after Opec reported its September oil output at eight-year highs, offsetting optimism over the group’s pledge to bring a global crude glut under control.
The dollar index’s climb to a sevenmonth peak also weakened demand for greenback-denominated crude among holders of euro and other currencies.
Adding weight to the market was the possibility that the American Petroleum Institute could report the first build in US crude stocks in six weeks in preliminary inventory numbers due at 2030 GMT, traders said.
Analysts expect the US government to say yesterday that crude stockpiles rose 300,000 barrels last week.
Brent fell 52 cents, or 1%, to US$51.89 (RM218) a barrel by 1600 GMT.
US West Texas Intermediate slipped 68 cents, or 1.3%, to US$50.11.
Opec’s latest monthly report, issued yesterday, showed an increase in its oil production in September to the highest in at least eight years and a rise in the forecast for 2017 non-Opec supply growth. The group produced 33.39 million bpd last month, up 220,000 bpd from August, and as much as 890,000 bpd above the new supply target.
“Once again, it reinforces that their deeds are not matching their words, and that they have a great deal of work cut out for them to try and come to an agreement that will satisfy anything,” said John Kilduff, partner at New York energy hedge fund Again Capital. – Reuters
From left: Novak, Mohammed, Algeria Minister of Energy Noureddine Boutarfa and Opec secretary-general Mohammed Barkindo of Nigeria at a press conference during the 23rd World Energy Congress in Istanbul yesterday.