Pressure’s on OPEC to set aside differences

Will global oil glut, low prices finally lead to cut in production?

If members of OPEC can put aside their political differences at a meeting Wednesday in Vienna — and that’s a big if — they may stabilize oil prices for the first time since the same members sent the commodity into a freefall two years ago. But skepticism lingers. The fallout from the Organization of the Petroleum Exporting Countries’ failure in November 2014 to reach a deal on production cuts sent crude oil into a downward spiral that culminated in a brief trip below $30 per barrel in early 2016.

Now, the energy industry is again training its gaze closely on OPEC as member countries and Russia gather Wednesday.

Hopes of a deal have injected some life into oil prices. The price of West Texas Intermediate crude oil, the U.S. benchmark, closed up 2.2% Monday to $47.08.

Any agreement to slash pro- duction is impossible or irrelevant without Saudi Arabia’s approval. Geopolitical tension between Saudi Arabia and Iran blocked the cartel from reaching an accord early this year, fueling a perception that infighting has weakened OPEC’s influence.

But this time might be different, despite lingering disputes between majority-Sunni-Muslim Saudi Arabia and majority-Shiite Muslim Iran. After oil’s slide, all parties have a vested interest in propping up the commodity to shore up their balance sheets.

DNB Markets analyst Torbjørn Kjus said in a research note there are “many obstacles for a deal,” but he projects the 11 member countries expected to sign on will collectively cut production by 4%, or 1.1 million barrels per day, based on October’s rate of 33.6 million.

The deal assumes Iran, Libya and Nigeria are exempted from the cuts. Iran has refused to agree to cuts based on the premise it has a right to increase production after sanctions were lifted, while Libya and Nigeria are returning to normalized levels after political disruption. Some experts are skeptical Saudi Arabia will agree to cut production while allowing Iran to snap up market share.

KARIM JAAFAR, AFP/GETTY IMAGES Saudi Oil Minister Ali al-Naimi, center, and other OPEC members will meet Wednesday as crude prices hover in the $40-to-$50-per-barrel range.