Saudi Arabia and Venezuela were optimistic on Wednesday about the possibility of an agreement to limit production and stimulate the rising prices at the meeting of the Organization of Petroleum Exporting Countries (OPEC).
“I Think that there is a state of mind, in general, optimistic and positive,” said the minister of Energy arabia, Khalid al Falih, before the start of the meeting. “We don’t know. What we will discover during the meeting,” he added about the possibility of an agreement.
“All the signs are very positive, you’re going to see,” he said with a smile the minister of Oil of venezuela, Eulogio del Pino, who predicted that it will reach an agreement “historic”.
The intense negotiations of the last few hours had highlighted important differences. A few hours of the start of the official meeting in Vienna, the positions of Saudi Arabia, the largest producer in the group, and Iran and Iraq, reluctant to limit the production, seemed irreconcilable.
In September, the 14 members of OPEC came to a preliminary agreement in Algiers to limit production to a level located between 32.5 and 33 million barrels per day (mbd). They also agreed to seek an understanding with other major producers non-members.
Since then, the saudis appear to have changed position. On the one hand, Riad ensures that it is not so urgent to reduce the production and on the other, requires that any decision in this regard include Iran and Iraq.
But both Tehran as Baghdad are reluctant to cut, in the first case because the country wants to regain its level of production after years of international sanctions and, in the second, because it needs oil resources for its fight against jihadists.
“We implemented the level of production that we decided in Algiers,” said laconic on Tuesday, the iranian Oil minister, Bijan Namdar Zanganeh, on his arrival in Vienna.
“Iran is playing your cards well (…) Know perfectly well that Saudi Arabia desperately needs higher prices though cloaked,” says Fawad Razaqzada, an analyst Forex.com.
so far this year, the price of the barrel have been continuously below us $ 50, compared with the $ 100 that came to quote in 2014, and on Tuesday there were around 45 after the doubts about the agreement. In case of failure, the observers most pessimistic predict a barrel to 40 or even $ 30.
Also it would be a hard blow for the OPEC, an organization born in 1960 which produces a third of the crude world, but has been losing influence in recent years in the global oil market.
“we See very little chance of a cut in OPEC (…) Now the most important thing is to save the face”, according to Bjarne Schieldrop, an analyst in the raw materials of the bank nordic SEB (London: 0MGS.L – news) .
the other piece of The puzzle is Russia, whose participation, like that of other countries outside OPEC, in the effort of reduction of the production is vital in order to achieve the objective of stimulating prices.
But by the time, Moscow prefers to wait to see what happens in Vienna. “There is no need [to participate in Wednesday's meeting], the OPEC has to hold first meeting”, said the Russian minister of Energy, Alexander Novak.
“of Course, if you reach a consensus, and the OPEC makes a decision, we will work as quickly as possible”, he added.
For the Latin american members of the cartel, Venezuela and Ecuador, the agreement is also key, especially in Caracas, very dependent on oil revenues.
Even the rich Saudi Arabia has had to make cuts in wages and public spending because of the fall of the crude oil and to cope with a budget deficit of 87,000 billion dollars in 2016.
No comments:
Post a Comment