Major OPEC players not ready to change situation in oil market, says expert
Baku, Azerbaijan, Aug. 11
By Elena Kosolapova – Trend:
An informal OPEC meeting next month is unlikely to change the situation in the oil market, says Richard Mallinson, a geopolitical analyst at Energy Aspects, an independent research consultancy specializing in global energy markets.
Earlier, media reported that the oil cartel announced plans to hold an unscheduled meeting and discuss oil output freezing late next month in Algeria.
“At the moment countries such as Venezuela and Algeria appear to be leading the push for a new round of discussions,” Mallinson told Trend by email. “Saudi Arabia and other powerful members of OPEC may agree to attend an informal meeting to show they are not preventing OPEC cooperation, but that does not necessarily mean they are willing to agree a production freeze.”
The expert noted that unless the big producers, particularly Iran and Saudi Arabia, reach a compromise and support a proposal on production freezing, this latest effort will be no more successful than previous attempts made earlier in the year.
At the meetings with other major oil producers in April and June 2016, OPEC discussed the possibility of oil output freezing to maintain oil prices. However, the parties failed to reach an agreement.
Mallinson believes that for now the oil market is right to be skeptical about the prospects of a deal being reached.
“While oil prices may receive a little support from the headlines, without hard evidence that a production freeze deal is on the table this should not be a significant factor in price action,” the expert said.
According to OPEC, global oil supply increased by 0.24 million barrels per day (bpd) to average 95.14 million bpd in July 2016 as compared to the previous month.
OPEC increased oil production by 46,400 bpd to 33.11 million bpd in July as compared to June.
Edited by EA
Follow the author on Twitter: @E_Kosolapova