Saudi Arabia Not Confident OPEC Can Reach Agreement on Cuts
VIENNA (Dispatches) - OPEC members and other oil-producing countries may not be able to agree a reduction in output to help shore up plunging prices, Saudi Arabia said on Thursday.
“No, I am not confident,” Saudi oil minister Khalid Al-Falih told reporters after coming out of a meeting of the Organization of Petroleum Exporting Countries in Vienna. “We’re still debating the distribution” of any possible cuts, he added.
Iraqi minister Thamir Abbas Al Ghadhban said deliberations was to continue on Friday. But he said: “We are hopeful that an agreement can reached.”
Unusually, the oil cartel had scrapped a planned news conference on Thursday at which the members had largely been expected to announce a new reduction in output to stem the recent sharp drop in the price of crude.
OPEC’s 15 members had been meeting in the Austrian capital on Thursday to decide what action to take, a day after US President Donald Trump took to Twitter to urge them not to cut output.
“Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!” said Trump, who has repeatedly accused the cartel of keeping prices artificially high.
The group is scheduled to meet again on Friday, this time with other oil-producing countries that are outside the cartel -- notably Russia -- to coordinate a joint policy.
Earlier, Saudi oil minister al-Falih had said that a cut of a million barrels per day would be ideal.
“Ideally, everyone should join equally. I think that’s the fair and equitable solution,” he said. OPEC daily output stood at 32.99 million barrels in October, according to the International Energy Agency.
Nevertheless, the volume and distribution of the cuts will depend on the participation of Russia, whose energy minister Alexander Novak was only expected in Vienna on Friday.
Novak, speaking from Saint Petersburg on Thursday, said that his country was watching closely how the situation was developing.
But with Russia heading into winter, “climate conditions” made it “much more difficult (to cut output) than for other countries,” he said.
Analysts took that as a hint that Russia might only sign up to additional cuts at a later date.
The price of a barrel of Brent, the European benchmark, fell four percent to below $60 Thursday because the projected reduction of around one million barrels was below what markets had been expecting, said CMC analyst, David Madden.