Bloomberg reported that with a week to go until OPEC meets to discuss the group’s production policies, a majority of the group’s members have already set out their positions: they want to extend a round of oil output cuts to eliminate a glut. Seven out of 13 members of the Organization of Petroleum Exporting Countries, representing 84 percent of the producer club’s collective output, have publicly stated support for continuing their supply curbs. Their pronouncements may diminish the impact of the meeting if it does go as planned.
Jan Edelmann, a commodity analyst at HSH Nordbank AG, said that “The communication has been very clear. So the actual meeting might be a bit of a non-event.”
OPEC’s meeting is still the most anticipated event for oil-watchers since the group announced its production cuts on Nov. 30 in an effort to end a three-year glut and steady the market. The curbs, in place since the beginning of the year, have failed to sustain higher prices as U.S. competitors have increased supplies.
In response, OPEC and its allies are signaling that they won’t let up in their efforts.
According to the group’s secondary source data, OPEC members Saudi Arabia, Iraq, Iran, the United Arab Emirates, Kuwait, Venezuela and Algeria have said they back some sort of extension of output cuts, or would do so if other members do. Those nations, which include the club’s six biggest producers, in April pumped a combined 26.6 million barrels a day. The current deals allows Iran to increase production and exempts two other members, Libya and Nigeria.
Meanwhile, four of the 11 non-OPEC nations that joined supply cuts — Russia, Azerbaijan, Oman and South Sudan — have said they would also support extending the curbs. Last month they collectively produced 12.9 million barrels of crude a day, data from the Paris-based International Energy Agency show. Russia accounts for 85 percent of that output.
Some other nations now cutting supplies haven’t yet stated their positions. Kazakhstan, which is trying to increase production at its giant new Kashagan field, won’t automatically extend its current cuts, its energy minister has said.
Source : BLOOMBERG
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