OPEC must find a “sustainable” way to stabilize oil markets in any agreement its members may reach when they meet next week in Algeria, the United Arab Emirates’ energy minister said.
The group’s 14 members may discuss proposals to limit production in an attempt to shore up crude prices at talks planned on Sept. 28. Oil-producing countries previously considered freezing output to counter a global supply glut that cut prices by more than half from their 2014 peak. Benchmark Brent crude has averaged about $43 a barrel this year.
“We need to be cautious not to do something that is a quick solution that is not going to last,” Al Mazrouei told reporters at an energy event in the U.A.E. emirate of Fujairah. “We need to target something that is sustainable.”
Crude gained about 11 percent in August when the Organization of Petroleum Exporting Countries said it would hold talks in Algiers later this month. The planned discussions signal that OPEC is reconsidering a Saudi-led policy the group adopted in 2014 that allows members to boost output to defend market share from higher-cost producers. OPEC’s production rose to a record 33.69 million barrels a day in August, just under a third of global demand, according to data compiled by Bloomberg.
OPEC Secretary-General Mohammed Barkindo has damped expectations, saying the Algeria talks are for consultation rather than decision-making, and Al Mazrouei expressed a similar view.
“We’re not meeting for a decision,” he said. “We are meeting for a consultation. and we will see what that meeting produces.”
OPEC probably won’t clinch a deal to limit production in Algiers as members stay focused on either boosting output or defending their respective slices of the market, according to a Bloomberg survey. The group faces the same internal rivalries that thwarted a previous Saudi-Russian proposal in April, according to all but two of 23 analysts surveyed. Iran and Iraq have signaled their resolve to increase output, while group leader Saudi Arabia is maintaining near-record supply.
OPEC plans to meet also with Russia at the International Energy Forum in Algiers.
Source: BloombergPrevious Next