OPEC deal may not be game-changer
Baku, Azerbaijan, Oct.19
By Leman Zeynalova – Trend:
It is doubtful that OPEC will be able to finalize a game-changing deal at its November meeting in Vienna, Austria Nov.30, according to the analysts of the UK Capital Economics consulting company.
“The lack of details, OPEC’s poor record of compliance with its own quotas and the potential for US shale producers to ramp up output makes us sceptical that the deal will hasten the oil market rebalancing,” said the report obtained by Trend.
In September, OPEC producers agreed during the informal meeting in Algiers 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.
Indeed, the number of active drilling rigs in the US has been increasing over the past month as firms react to the previous rise in prices, said the analysts.
The report said that even if OPEC is successful in cutting production and raising prices, this could just encourage more output from shale.
According to a monthly report from the Energy Information Administration, oil production from seven major US shale plays is forecast to decline by 30,000 barrels a day to 4.429 million barrels a day in November from October.