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OPEC meeting: major surprises unlikely

Oil&Gas Materials 31 May 2016 17:51 (UTC +04:00)

Baku, Azerbaijan, May 31

By Aygun Badalova - Trend:

This week's OPEC meeting in Vienna is likely to pass without any major surprises, analysts at the British consulting company Capital Economics believe.

"Policymakers should be a little happier heading into the meeting than they were at the previous one in December - after all, oil prices broke through $50 a barrel last week for the first time this year, up more than 70 percent from their lows in January," analysts said in a report, obtained by Trend.

However, analysts doubt that the meeting will conclude with any meaningful agreement.

Recent comments from Saudi Arabia's new Oil Minister Khalid al-Falih suggest that there is a strong possibility that the Kingdom will increase production in the coming months in order to meet domestic demand over the summer, according to the analysts.

"This, coming alongside rising production from Saudi Arabia's long-term foe, Iran, means that any attempt to resurrect a deal to freeze oil output is unlikely to get off the ground," analysts said.

The last meeting of oil producers in Doha ended without any agreement. The talks on the oil output freeze collapsed after Saudi Arabia surprised OPEC by reasserting the demand that Iran also agrees to cap its oil production.

The next OPEC meeting will be held June 2 in Vienna.

Total OPEC oil production in April averaged 32.44 million barrels per day, an increase of 188,000 barrels per day over the previous month, according to OPEC latest Oil Market Report.

Saudi Arabia's oil production in April averaged 10.125 million barrels per day compared 10.133 million barrels per day in March.

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