Saudis unlikely to push for deeper OPEC cuts
BAKU, Azerbaijan, Nov.23
By Leman Zeynalova – Trend:
Saudi Arabia is unlikely to push for deeper oil cuts in OPEC during the upcoming meeting in Austria, Trend reports citing UK-based Capital Economics research and consulting company.
“There has been a lot of speculation in the press about the possible outcome of the upcoming OPEC+ ministerial meeting. For our part, we think that Saudi Arabia will push for the current output cuts to be rolled over, in part to support oil prices to improve its fiscal position. However, the kingdom is unlikely to push for deeper cuts to avoid losing more market share to the US. We expect Russia to pay lip service to any agreed cuts, but to continue to produce above quota,” reads the analysis prepared by Capital Economics.
As for the weekly oil price results, the company said the price of Brent was volatile this week.
“It initially fell sharply, to just $60 per barrel, in part because the American Petroleum Institute (API) reported a 6 million barrel rise in US crude inventories. However, prices then rebounded to almost $64 per barrel after the publication of a relatively bullish stocks report by the US Energy Information Administration (EIA). While US commercial crude stocks increased, it was almost entirely due to a release from strategic reserves. The other parts of the report painted a more positive picture for prices, as implied product demand remained strong,” the analysis reads.
In late 2018, OPEC and a number of countries outside this organization (OPEC+ format) decided to modernize the terms of the agreement on the reduction of oil production, in force from the beginning of 2017. The countries agreed to reduce the total production by 1.2 million barrels per day from the level of October 2018.
On July 2, 2019, a decision was made in Vienna to extend the agreement on reducing oil production by OPEC member and non-member states until the end of the first quarter of 2020.
The 177th Meeting of the OPEC Conference is expected to be held December 5, 2019, followed by the 7th OPEC and non-OPEC Ministerial Meeting on December 6 in Vienna, Austria.
Follow the author on Twitter:@Lyaman_Zeyn