Doubts over OPEC deal to cut output

Failure to get an accord on Wednesday could send oil prices tumbling and deal a further blow to the credibility of the 56-year-old Organization of the Petroleum Exporting Countries.

Doubts over OPEC deal to cut output

World Bulletin / News Desk

Doubts grew Monday that OPEC members can overcome their rivalries in the name of higher oil prices in Vienna this week and nail down the cartel's first output cut in eight years.

Not getting a deal "could be the end of OPEC", energy analyst Alexandre Andlauer told AFP. Fading hopes for an agreement sent oil prices lower on Friday. On Monday they were little changed.

Saudi Arabia's energy minister on Sunday added to the pessimism by suggesting that recovering demand would help "stabilize" prices next year, even without OPEC intervention.

"We don't have a single path which is to cut production at the OPEC meeting, we can also depend on recovery in consumption, especially from the US," Saudi media quoted Khaled al-Falih as saying.

Investors are concerned that the meeting may be a "waste of time", said Mike van Dulken, Head of Research at Accendo Markets.

In September the cartel agreed in principle to lower production to 32.5-33.0 million barrels per day (bpd), meaning a cut of between 600,000 and 1.1 million bpd from current levels.

This, OPEC's 14 members hope, will reduce the mammoth global supply glut and so increase the market price of oil from its current painful level of below $50 a barrel.

It also marks a reversal of OPEC kingpin Saudi Arabia's two-year-old strategy of flooding the market to squeeze out rivals, in particular US shale oil producers.

Güncelleme Tarihi: 28 Kasım 2016, 17:21