OPEC meeting ends, but no announcement yet of expected cuts - MARKET WATCH
Oil producers expected to extend production cuts for a fourth year
The Organization of the Petroleum Exporting Countries headquarters in Vienna.
VIENNA — The countries that make up the OPEC oil-producing cartel ended talks late Thursday without an announcement on possible deep cuts to production that would support the price of fuel around the world.
An OPEC spokesman told waiting journalists at 10 p.m. local time that an expected news conference would not take place and that a written statement might come later. Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, and other officials then left the meeting without announcing any deal.
OPEC’s members have been expected to prolong production cuts that they agreed on for the past three years, while Russia’s energy minister said that even deeper cuts were under discussion. The price of crude has been held down in recent years by a resurgence in supplies from countries outside OPEC, particularly the United States.
As it stands, OPEC nations have agreed to cut production by 1.2 million barrels per day through March. Russian Energy Minister Alexander Novak, whose country is not part of OPEC but joins part of the meeting to coordinate production, said Thursday that the group was discussing a further cut of 500,000 barrels a day “in order to safely go through the seasonal demand trough in the first quarter 2020.”
OPEC officials were to broaden discussions to include non-OPEC members on Friday.
Saudi Arabia is bearing the burden of the largest share of OPEC’s production cuts. But some member countries such as Iraq have been breaching the agreement and producing more than their allotted amount.
Analysts note that if countries are already not complying with the current agreement, voting for more cuts could be pointless.
“I think the Saudi position is they’re willing to cut more if needed, but they want better compliance,” said Bhushan Bahree, executive director of global oil at research group IHS Markit.
Brent crude oil BRNG20, -0.17% hovered near $63 per barrel Thursday. Prices have fluctuated throughout the year, reaching nearly $75 in April after U.S. sanctions on Iran and Venezuela limited world supply, but lingering trade tensions between the U.S. and China dampened economic expectations pushed prices back down.
West Texas Intermediate CLF20, -0.19% , the U.S. benchmark crude, was trading above $58.
Russia has indicated it wants its oil production re-calculated to exclude gas condensate, a liquid byproduct of natural gas production. Condensate is counted against production totals for non-OPEC members but not for members.
Even if members of the cartel cut production, there is more oil coming to market from non-OPEC nations, including the U.S., Canada, Brazil, Norway and Guyana, which will more than make up for any drop in production, according to IHS Markit.