The oil-producing countries of OPEC, the organization that produces close to a third of the crude world, has met this Thursday in Vienna to discuss reducing production to stimulate oil prices before the rebates of the last few weeks. Since October, crude oil has become less expensive something more than a 30%.
MORE INFORMATION
pressures saudis to cut supply collide with the desire to Trump the oil cheaper Qatar announces its exit from OPEC to the downward Pressure on the oil The excess supply and the cooling economic relax the price of crude oil Less oil: the solution of the OPEC to raise the price of a barrel
The organization has decided to postpone its decision on the trim of the petrol pump waiting for the decision of Russia, which is shown remisa to now reduce production so that prices will not impact on the population at the doors of the peak of the siberian winter.
The members of this organization, led by Saudi Arabia, have agreed to a slight reduction of the production, but the doubts about the size of the cut have excited the markets. Remains to know the final decision from Russia, which will be known this Friday during the third day of the meeting of the OPEC. In fact, the committee of the OPEC+, which also involved Russia, recommended to their members a cut of the production but not the precise figures in a formal agreement.
But things are not really clear. The minister of oil of Saudi arabia, Khalid Al-Falih, acknowledged to the press that he did not trust that the OPEC and other oil producers (Russia) were able to reach an agreement. “The uncertainty remains regarding the final decision of the OPEC,” said Brian Kessens, an analyst, according to Bloomberg. “At this time, it is a market that is assuming the worst.” The massive sale of oil also shot up as the stock markets sank. Brent crude, of reference in Europe, came to be 5%, the largest decline in two weeks.
The decision puts on the ropes to Saudi arabia, walk on the precipio. Since the reign Arabia need to increase prices to balance its accounts while your main socio-historical has warned that do not want to price increases. Donald Trump warned last Wednesday to the saudis that “nobody wants, or nobody needs a oil more Casinomaxi expensive.” Through its Twitter account, the republican said “hopefully, the OPEC will maintain the flow of oil as is, without any restrictions”.
Washington “is not in a position to tell us what we should do”, said the minister of saudi arabia. “I don’t need anyone’s permission to reduce” the production, he added. Arabai saudi Arabia had proposed at the start of the appointment in Vienna, a reduction of pumping 900,000 barrels per day and one million barrels per day. “We are looking for a reduction is enough to balance the market”, said the minister of Energy arabia, Khaled al Faleh, a heavy weight of the organization, before the start of this important meeting, according to Reuters.
Al Faleh defended Thursday a reduction of production of one million barrels per day.” But this level, lower than the expectations of the markets, caused a further drop in prices. The barrel of Brent, of reference in Europe, lived a day of high volatility, and came to fall more than 5% falling below $ 59.
“Saudi Arabia suggested a reduction of production lower than the consensus believed,” explained David Madden, an analyst for CMC Markets.
The real extent of the reduction of the production is the main unknown of the meeting, as well as that could be agreed upon Friday in a meeting between the OPEC and its partners, with Russia to the head. These two groups, which represent more than half of the world’s supply, go hand in hand from the end of 2016, by an agreement of limitation of production.
The minister of Energy Russian, Alexander Novak, who must attend the Friday meeting in Vienna, said Thursday from St. Petersburg, that his country was “the actual situation and the actual evaluation of the market”. But he recalled that in the middle of winter, the “weather conditions” Russian made “much more difficult to reduce (production) to other countries,” hinting that a possible effort of Moscow would be made later. To analysts of Commerzbank, “Russia will play a key role in this context.”
on Wednesday, the brokerage firm, london-based PVM was estimated that an absence of reduction of the production would unleash “a frenzy of sales of biblical proportions and would ensure the return to an overabundance of world oil”.
The margin of maneuver for OPEC is reduced, with a Saudi Arabia with few possibilities to challenge openly the american president after the international outrage generated by the murder of the journalist and critic of the power of the kingdom Jamal Khashoggi in the consulate of his country in Istanbul. The crown prince arabia, Mohamed bin Salman, you need both the protection of their ally in the White House as a barrel of oil more expensive to carry out his economic reforms.
