Saudi Arabia tried to persuade Russia on Wednesday to cut oil production significantly with OPEC next year in an effort…
Saudi Arabia tried to persuade Russia on Wednesday to cut oil production significantly with OPEC next year in an effort to arrest a decline in commodity prices and prevent another global glut.
OPEC meets Thursday in Vienna followed by talks with Allies like Russia on Friday. The producer group’s de facto leader, Saudi Arabia, has indicated a need for steep decline in production from January, but has been under pressure from US President Donald Trump to push oil prices even lower.
The Russian Energy Minister Alexander Novak told reporters that he had a “good” meeting with his Saudi Arabian counterpart Khalid al-Falih on Wednesday and that they would have more talks.
Saudi Arabia has shown that it wants the Organization for Petroleum Exporting Countries and its Allies to reduce production by at least 1
.3 thousand barrels per day or 1.3 percent of global production.
Riyadh wants Moscow to contribute at least 250,000-300,000 bpd to the average, but Russia insists that the amount will be only half of it, says OPEC and non-OPEC sources. 19659002] Oman’s oil ministers said he believed OPEC and its allies would reach an agreement this week to cut oil production.
“It is not easy but we will always work with our colleagues”, United Arab Emirates battles Energy Minister Suhail bin Mohammed al-Mazroui told reporters in Vienna when asked about Russia’s position.
A source near the Russian Ministry of Energy said: “Nobody is keen to cut if there is no emergency. It is the US where we see the largest part of the increase in oil production. OPEC and Russia will be very careful about voluntary” blood loss “. “
Russia, Saudi Arabia and the United States have won the position of the highest raw producer in recent years. The United States is not part of any production-restrictive initiative due to its strict antitrust law and fragmented oil industry.
Oil prices have fallen by almost a third since October to about $ 61 a barrel after Saudi Arabia increased production to compensate for a decrease in Iranian oil exports due to new US sanctions.
Washington also imposed some sanctions on certain buyers of Iranian crude oil, which further increases the fears of an oil spill next year.
Possibly complicate any OPEC decision is the crisis about the killing of journalist Jamal Khashoggi at the Saudi consulate in Istanbul in October. Trump has encountered Saudi crown prince Mohammed bin Salman despite talks from many US politicians to bring about severe sanctions against Riyadh.
“How can saudians cut significantly if Trump does not want a big cut?” Says Gary Ross, Managing Director of US-based Black Gold Investors and a veteran OPEC watcher.
“Trump is worried about the Fed and inflation. So he wants low prices now.” Even if the Saudi is disgusting with a deep production cut, it will spur Democrats in Congress to go more actively for Nopec legislation and withdraw the United States  The Nopec legislation discussed by US legislators could make it possible to sue Saudi Arabia and other OPEC members for pricing.
Bob McNally, CEO of the Saudi Arabian forces. Rapidan Energy Group in the United States, said OPEC was stuck between a rock and a hard place given pressure from Trump, on the one hand, and the need for higher revenues on the other.
“We think OPEC will try to come up with a fuzzy production cut … It will not be called a cut but will effectively mean an average
(Further reporting by Rania El Gamal and Ahmad Ghaddar; Writing of Dmitr Y Zhdannikov; Editing Dale Hudson; Graphics by Amanda Cooper)