Baku, Azerbaijan, Oct.13
By Leman Zeynalova – Trend:
In reality, it is quite likely that OPEC can fail to reach a deal during the November 30 meeting in Vienna, Austria, director of Downstream Consulting at IHS Markit, Spencer Welch told Trend Oct.13.
In September, OPEC producers agreed during the informal meeting to cut down the oil output to 32.5 million barrels per day (bpd) from current production of 33.24 million bpd.
How much each country will produce is to be decided at the next formal meeting of OPEC in November.
“Saying 32.5-33.0 million barrels per day is relatively easy, breaking this down country-by-country to a total which meets the new range, where each individual country agrees with their new limit, is a huge challenge,” said Welch.
He pointed out that this has rarely been achieved in OPEC’s history, as previous cuts really only worked because Saudi Arabia was willing to cut its own production.
“The announcement after Algiers is quite brave and risky for OPEC. They have made this very public and the effect has been to push oil price up $6/bbl,” he said. “If they fail to delivery in November, they will lose some credibility. Therefore we can only assume that they are reasonably confident that it can be achieved.”
The price of crude oil climbed on Oct.13, gaining support from record Chinese imports, but gains were limited after OPEC said its production had risen to the highest level in at least eight years and following reports of an increase in US crude stocks.