...

Is OPEC close to deal?

Oil&Gas Materials 27 September 2016 15:43 (UTC +04:00)
Analysts of the US JP Morgan bank retain the view that the chances of an oil freeze agreement during the International Energy Forum meeting are slim.
Is OPEC close to deal?

Baku, Azerbaijan, Sept. 27

By Aygun Badalova – Trend

Analysts of the US JP Morgan bank retain the view that the chances of an oil freeze agreement during the International Energy Forum meeting are slim – 25 percent - despite the myriad headlines associated with discussions held beforehand.

“However, these talks are a necessary step towards any future agreement, if not at November’s OPEC Ministerial Meeting, then more probably at the mid-2017 OPEC Ministerial Meeting,” analysts said in weekly Oil Market report, obtained by Trend.

Analysts believe that producers should focus more on export volumes, rather than production, given revenues are tied to the former and not the latter, given shifts in domestic consumption and the expansion over time of refining capacity.

“In our view, the prospects for a deal hinge on the willingness of three key players – Saudi Arabia, Iran and Russia – to reach an agreement that is equitable, transparent and binding. The thorny issue of the potential recovery in Libyan and Nigerian production in the coming months can be overcome, in our view, if parties are willing to compromise and be flexible, given the potential production base across which an adjustment could be made is close to 45 million barrels per day,” analysts said.

The biennial Ministerial International Energy Forum starts in Algiers on September 26. Members of OPEC and Russia are set to meet on the sidelines of the forum.

Crude oil prices edged down on Tuesday as a jittery market reacted to statements by Iran that dimmed hopes for an agreement by major oil producers to cap or freeze output, the Wall Street Journal reported.

Brent crude, the global oil benchmark, fell 1.77 percent to $46.51 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 1.37 percent at $45.30 a barrel.

As energy ministers arrived in Algiers for a summit on energy, Iran Oil Minister Bijan Zanganeh called the meeting set for Wednesday “consultative,” adding to concerns that member nations of OPEC won’t adopt production limits to prop up the sagging price of oil.

Tags:
Latest

Latest