Opec seeks to build mo­men­tum for plan

> Car­tel to in­vite more non-mem­bers to talks af­ter in­for­mal meet­ing with Rus­sia, Mex­ico

The Sun (Malaysia) - - SUNBIZ -

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.

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