OPEC’s High-Level Technical Committee, which is meeting in Vienna to discuss the implementation of the proposed group-wide production cap, could be done by the end of the day today, a Nigerian delegate
The committee is a body selected by member states, comprised of OPEC governors and oil ministry officials, and tasked with clarifying the manner in which the production cut will be implemented. However, as Reuters points out, the committee cannot decide on policy; it can only recommend a course of action that will be approved or discarded by the minister of OPEC members, who are meeting next Wednesday in Vienna.
According to the Nigerian delegate cited by Reuters, Ibrahim Waya, “The likelihood is that everybody will be on board by the end of today,” including Iran and Iraq.
His optimism, however, may be a bit much in light of the latest
The Iraqi comments come just one day after Oil Minister Jabbar al-Luaibi
Quotes like these—which some interpret as contrarian, some purposefully ambiguous, and others overly cautious—have been shaking international oil markets for almost two months now, keeping benchmark prices on a perpetual see-saw as analysts endeavor to read between the lines and reflect the latest mood swing of the market in their forecasts.
Goldman Sachs yesterday
But skepticism remains in the absence of clear and unequivocal support for the plan—whatever that plan actually is—between major OPEC producers such as Saudi Arabia, Iraq, and Iran, not to mention Russia, which although not an OPEC member, would be crucial for any meaningful reduction in supply.
Despite all the public comments designed to prop up a struggling market, OPEC members and Russia have increased crude oil production since the talks began in September.
With the total world oil demand estimated to be
So regardless of the outcome of the meeting, which is still very much in question, OPEC, left on its own to cut a mere million barrels per day, cannot realistically and fundamentally rebalance the heavy overhand with demand in the six months that they are suggesting.
By Irina Slav for Oilprice.com
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