OPEC meeting begins with expectation of continuing production cut

VIENNA, OPEC ministers began Thursday their meeting in the Austrian capital with expectation of continuing the production cut deal for a period of nine months to tackle low prices.

According to sources partaking in the meeting, the organization’s member states will focus on stabilizing global prices after they went down by 20 percent last November, settling at USD 60 per barrel (pb) OPEC members, which are under strong political pressure, and allies from outside the organization, are going to debate whether to keep the 1.5 million barrel production cut at the current level or decrease it.

The International Energy Agency (IEA) warned, last November, from supplies exceeding demands next year, which in turn will negatively affect the oil price.

Similarly, in a November report, OPEC warned that demand for its oil in 2019 might decrease by 1.1 million barrels per day (bpd), compared with this year’s 1.4 bpd.

Pressure from outside the organization, especially from the US, might force producers to slightly limit production, resulting in keeping the price between USD 60 to 70 pb.

Observers say that decreasing production to one million bpd or less is not enough to maintain prices at a reasonable level.

OPEC members, namely Saudi Arabia and non-members led by Russia, took a decision in 2016 to decrease production as a measure to boost oil prices.

Source: Kuwait News Agency