OPEC and partners face steep challenge to reach oil cut deal

Vienna, Dec 7: OPEC will meet with 10 partner countries, including Russia, on Friday to try to thrash out an agreement on oil production cuts, a day after the group's members failed to reach a deal.

The oil cartel had been expected to sign off on cuts to stem a plunge in oil prices at a meeting on Thursday, but it broke up without an accord.

“No, I am not confident” about the chances of a deal, Saudi oil minister Khalid Al-Falih told reporters after a long day of negotiations at OPEC's headquarters in Vienna.

However, OPEC and its non-cartel members — who account for around half of global output — agree on one thing: a glut on the market has led to oil prices falling by more than 30 percent in the space of two months.

However, the major players among the oil giants all have their own reasons to look to others to act.

For Russia, which leads the non-member countries in the so-called OPEC+ alliance, “it's much more difficult to cut than for other countries, because of our climatic conditions,” Russian Energy Minister Alexander Novak said on Thursday in Saint Petersburg.

Saudi Arabia, meanwhile, has to bear in mind pressure from the US, after President Donald Trump demanded in a tweet on Wednesday that OPEC not boost prices.

In addition, the kingdom's diplomatic position has been weakened by the furore over the killing of journalist Jamal Khashoggi.

Though al-Falih insisted that “we don't need permission from anyone to cut” production, the figure of a million barrels put forward by Saudi Arabia was lower than the reduction expected by the markets.

 

(AFP/APP)

Posted on: 2018-12-07T09:30:00+05:00

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