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OffbeatOPEC eyes production cut after Saudis say they won't shock market

17:55  06 december  2018
17:55  06 december  2018 Source:   bloomberg.com

Qatar to withdraw from OPEC as of January 2019 - minister

Qatar to withdraw from OPEC as of January 2019 - minister Qatar to withdraw from OPEC as of January 2019 - minister

OPEC ministers discussed cutting their oil output by about 1 million barrels a day, a proposal that would go a little further than Saudi Arabia’s suggestion of a reduction that wouldn’ t shock the market . Under pressure after a collapse in oil prices last month, the kingdom is seeking to walk a fine line

The Organisation of the Petroleum Exporting Countries ( OPEC , /ˈoʊpɛk/ OH-pek) is an intergovernmental organisation of 15 nations, founded in 1960 in Baghdad by the first five members

OPEC ministers discussed cutting their oil output by about 1 million barrels a day, a proposal that would go a little further than Saudi Arabia’s suggestion of a reduction that wouldn’t shock the market.

Under pressure after a collapse in oil prices last month, the kingdom is seeking to walk a fine line between preventing a surplus and appeasing U.S. President Donald Trump.

In one proposal being considered at talks on Thursday, OPEC could cut its own output by 900,000 to 1 million barrels a day and then seek further curbs from non-OPEC partners, one delegate said, asking not to be named as an agreement hasn’t yet been reached. Ministers are studying participation levels for such a proposal before potentially putting it to key ally Russia, the delegate said.

Qatar to Exit OPEC

Qatar to Exit OPEC The gas-rich nation of Qatar on Monday said it is withdrawing from OPEC at the start of next year. The head of the country's energy ministry said it plans to focus its energy investments on further developing its natural gas resources. "Achieving our ambitious growth strategy will undoubtedly require focused efforts, commitment and dedication to maintain and strengthen Qatar's position as the leading natural gas producer," Saad Sherida al-Kaabi said at a press conference in Doha, according toexcerpts shared on Twitter by the state oil and gas company, Qatar Petroleum.

OPEC and non- OPEC producers led by Russia agreed on Thursday to extend oil output cuts until Both countries have been exempt from cuts due to unrest and lower-than-normal production . Saudi Arabia's Oil Minister Khalid al-Falih listens during a news conference after an OPEC meeting in

Russia will not attend the Organization of the Petroleum Exporting Countries ( OPEC ) meeting on Wednesday. Saudi Arabia's Energy Minister Khalid al-Falih said on Sunday the oil market would rebalance itself in 2017 even if producers don’ t cut .

That would be a more bullish outcome than Saudi Energy Minister Khalid Al-Falih had hinted at early in the day, when he said a reduction of about 1 million barrels a day from the entire OPEC+ coalition should be adequate and “certainly we don’t want to shock the market.”

The summit in Vienna wasn’t the only story on Thursday. As ministers sat down at the headquarters of the Organization of Petroleum Exporting Countries, Russian Oil Minister Alexander Novak flew to St. Petersburg to meet President Vladimir Putin to decide on their country’s contribution. If the group’s most important ally in the OPEC+ alliance decides to make a sizable cut, the cartel will follow up.

No Deal?

After four hours of discussions in the Austrian capital, ministers were still poring over proposals and one delegate said it’s possible the group won’t announce a deal on Thursday. Al-Falih had earlier said that “if everybody is not willing to join and contribute equally, we will wait until they are.”

OPEC agrees on larger-than-expected cut after marathon talks

OPEC agrees on larger-than-expected cut after marathon talks OPEC finally broke an impasse over production curbs, agreeing on a larger-than-expected cut with allies after two days of fractious negotiations in Vienna. require(["medianetNativeAdOnArticle"], function (medianetNativeAdOnArticle) { medianetNativeAdOnArticle.getMedianetNativeAds(true); }); The cartel and its partners agreed to remove 1.2 million barrels a day from the market, with OPEC itself shouldering 800,000 barrels of the burden. Iran emerged as a winner from the contentious talks, saying it’s secured an exemption from cuts as it suffers the effects of U.S. sanctions.

Oil prices resumed their downward march on Monday after Saudi Arabia's powerful oil minister said OPEC would not cut production at any price. "The Saudis seem to be continuing with their game plan to shock prices lower by sticking it to the market that they will put more oil out if they have more

After a weekend of comments from several Gulf OPEC members reiterating their intent not to Naimi also said the Saudis might boost output instead to grow their market share and that oil “may “The Saudis seem to be continuing with their game plan to shock prices lower by sticking it to the market

Oil in London tumbled as much as 5.2 percent to $58.36 a barrel, before paring losses to $60.34 at 2:50 p.m. local time. Equity markets also declined as concern resurfaced that trade tensions between the U.S. and China are far from resolved.

Saudi Arabia, OPEC’s de facto leader, has made clear that it won’t shoulder the burden of trimming production alone. Its cooperation with Russia shows how much OPEC has changed since 2016 when the two countries ended their historic animosity and started to manage the market together. The alliance has transformed OPEC into a duopoly in which Russia, which isn’t a formal member of the cartel but part of the production-cuts alliance, is asserting its power.

Russia Concern

While Middle Eastern producers are desperate to reverse the recent slump in prices to pay for government spending, sensitivities are different in Russia, where the government is running a budget surplus and a weak ruble mitigates the impact of lower prices. The government is concerned about the impact of higher prices on Russian consumers, stoking discontent with economic policy, according to one Kremlin official.

Qatar quitting OPEC means the oil cartel is now just a 'two-member organization'

Qatar quitting OPEC means the oil cartel is now just a 'two-member organization' The future of OPEC is on shaky ground, an analyst has told CNBC, after Qatar abruptly announced it would sever ties with the influential oil cartel after almost six decades. require(["medianetNativeAdOnArticle"], function (medianetNativeAdOnArticle) { medianetNativeAdOnArticle.getMedianetNativeAds(true); }); Qatar's Energy Minister Saad al-Kaabi said at a news conference Monday that Doha would leave OPEC on January 1, 2019. The decision comes just days before OPEC and its allies are scheduled to hold a much-anticipated meeting in Vienna, Austria.

Even if OPEC doesn’ t cut production later this week, Canadian producers in Alberta, the country ’s production hub, announced an “unprecedented” production cut over the weekend. But given the recent reports about the discontent with Saudi Arabia’s borderline dictatorial rule over the bloc, the

The OPEC cartel will be forced to cut output if President Clinton’s release of petroleum reserves causes a dip in oil prices, Libya’s oil minister said yesterday. “I hope this decision doesn’ t shrink the price too much and we are forced to cut production ,” said Abdullah el-Badri.

A day of preliminary talks in Vienna on Wednesday concluded with a panel led by Saudi Arabia and Russia recommending an output reduction lasting six months, but the committee didn’t discuss how big any cuts should be. Al-Falih said Thursday his preference was for curbs extending into the third quarter.

The group may agree on a formal cut of under a million barrels a day, Nigeria’s oil minister, Emmanuel Kachikwu, said in a television interview on Thursday morning.

OPEC is also contending with vociferous opposition from the U.S. president, who’s taken to using his Twitter account to berate the group’s policies and sees low oil prices as key to sustaining America’s economic growth.

While ministers met in OPEC’s Vienna headquarters on Wednesday, Trump tweeted that the “world does not want to see, or need, higher oil prices!”

“I’m cautiously optimistic that a deal gets done, but the devil will be in the detail,” said Mohammad Darwazah, a director at Medley Global Advisers. “How OPEC communicates this to the market may be just as important as what gets done.”

Does Trump control OPEC policy? A critical meeting is set to test the energy markets' 'biggest fear'

Does Trump control OPEC policy? A critical meeting is set to test the energy markets' 'biggest fear' Oil markets are deeply concerned about the power President Donald Trump has over some of the world's largest crude producers.

Saudi Arabia signaled it’s ready to cut oil production more than expected, a surprise announcement made minutes after Russia and several non-other OPEC countries pledged to curb output "This is shock and awe by Saudi Arabia," said Amrita Sen, chief oil analyst at Energy Aspects Ltd. in London.

Since 1989, OPEC has hammered out several production cuts just like the one it negotiated in But this time is different: Saudi Arabia exceeded its promised reduction of 490,000 barrels per day by 70 Related: OPEC could extend oil production cut by six months. The IEA said that Russia delivered a

Sharing the Burden

Although Russia, the largest producer in the OPEC+ group, has agreed to a cut in principle, the eventual size of their contribution remains undefined and will be key to putting together the final deal.

In private conversations earlier this week, OPEC delegates said that Saudi Arabia had favored a Russian cut of about 300,000 barrels a day, but Moscow was seeking a smaller reduction of about 150,000, said people familiar with those talks. Those differences persisted after Wednesday’s meeting, OPEC delegates said.

Iran is currently subject to U.S. sanctions and as such won’t participate in any curbs, the country’s Oil Minister Bijan Zanganeh said. OPEC ministers are also discussing whether to exempt Libya and Venezuela from making production cuts, a delegate said Thursday.

The last time the OPEC+ group agreed to curtail output, in late 2016, it settled on a combined 1.8 million-barrel-a-day reduction. In preparatory meetings ahead of this week’s summit, delegates had said a cut of as much as 1.3 million barrels a day next year is needed as demand growth slows and U.S. shale production surges.

Resolving the group’s internal differences and convincing a skeptical oil market that they’re serious about preventing a new supply glut in 2019 would require ministers to conclude weeks of debate and settle on a final figure.

"Some countries will struggle because their economies are very constrained" and Nigeria itself could only manage a small cut, Kachikwu said.


Saudi Arabia faces a dramatic choice at OPEC.
The choice facing Saudi Arabia at next week’s OPEC meeting is dramatic: cut oil production and enrage Donald Trump, or keep pumping and risk ultra-low prices blowing up its economy. For Mohammed bin Salman, the kingdom’s crown prince and day-to-day ruler, the dilemma has been sharpened by the murder of Jamal Khashoggi in the Saudi consulate in Istanbul. Under pressure from angry senators and other Washington power players, he needs Trump’s political protection.

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