rain
Monday December 10th, 2018 12:17AM

OPEC delays oil output decision pending Russia talks

By The Associated Press
Related Articles
  Contact Editor

VIENNA (AP) — OPEC countries hoping to support the price of oil put off their decision Thursday on how much to reduce oil production until they negotiate with ally Russia on Friday on how much it will contribute to the cut.

Some saw it as a sign that the group of oil-producing nations may not have the political unity to rein in supply and is suffering under political pressure from U.S. President Donald Trump to not push prices up again. Others interpreted it as a tactic to get Russia to agree to big cuts as well.

The price of oil has fallen about 25 percent because major producers — including the U.S. — are pumping oil at high rates. It fell further on Thursday after OPEC's lack of action and amid broader concerns about global economic growth.

Saudi Arabia, the heavyweight within OPEC, said Thursday it was in favor of a cut of about a million barrels a day.

But upon leaving the meeting, Saudi oil minister Khalid Al-Falih said "we're still deliberating." He said the OPEC countries were still discussing the distribution of the cuts between them.

Iran, Saudi's regional rival and fellow OPEC member, has resisted any notion of cutting its output as its crude exports are being pinched already by U.S. sanctions. It has wanted an exemption.

The OPEC countries will now discuss the meeting with Russia, which is not part of OPEC but has been coordinating its output levels to support the market.

Al-Falih said a decision would take all day Friday.

"I'm not confident," he added.

Some experts saw that as a tactical move by OPEC countries to not announce a production level as they prepare to ask Russia and several other smaller non-OPEC countries to also cut their output.

"If they would, then (Russia and others) could adjust their negotiation strategy," said Jan Edelmann, analyst at HSH Nordbank.

Whatever the logic, the lack of clarity put another dent in the price of oil. The international benchmark, Brent, was down $2.20 at $59.36 a barrel on a day when stock markets also fell sharply around the world.

The fall in the price of oil will be a help to many consumers as well as energy-hungry businesses, particularly at a time when global growth is slowing. And Trump has been putting pressure publicly on OPEC to not cut production. He tweeted Wednesday that "Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!"

While Saudi Arabia has indicated it is willing to cut production, its decision may be complicated by Trump's decision to not sanction the country over the killing of dissident journalist Jamal Khashoggi. U.S. Senators say, after a briefing with intelligence services, that they are convinced that Saudi's de-facto ruler, Crown Prince Mohammed bin Salman , was involved in Khashoggi's death. Some experts say that gives the U.S. some leverage over the Saudis, though Al-Falih denied that on Thursday.

When asked if the Saudis had permission from Trump to cut production, Al-Falih replied: "I don't need permission from any foreign governments."

Experts say this week's meetings of the Organization of the Petroleum Exporting Countries will influence the price of oil over the coming months. How strongly it does so could depend on Russia's contribution.

Analysts estimate that if Russia is willing to step up its production cuts, OPEC and non-OPEC countries could trim production by a combined 1.3-1.4 million barrels a day. A cut of 1 million barrels would be the minimum to support the market, and anything less could see the price of oil fall another $10 a barrel, according to Neil Wilson, chief market analyst at Markets.com.

"The cartel has to go above and beyond the 1 million barrels cut, to at least 1.4 million to really steady the ship," said Wilson. "The stakes are high now for OPEC."

OPEC's reliance on non-members like Russia highlights the cartel's waning influence in oil markets, which it had dominated for decades. The OPEC-Russia alliance was made necessary in 2016 to compete with the United States' vastly increased production of oil in recent years. By some estimates, the U.S. this year became the world's top crude producer.

OPEC is also riven by internal conflict, particularly the rivalry between Saudi Arabia and Iran. Meanwhile, Qatar, a Saudi rival and Iranian ally, said this week it would leave OPEC in January. While it said it was purely a practical decision because it mainly produces natural gas and little oil, the move was viewed as a symbolic snub to the Saudi-dominated organization.

___

David Rising and Geir Moulson in Berlin and Anthony Mills in Vienna contributed to this report. Piovano reported from London.

  • Associated Categories: Associated Press (AP), AP World News, AP Business, AP Business - Economy, AP Business - Industries, AP Business - Utilities
© Copyright 2018 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
OPEC delays oil output decision pending Russia talks
OPEC countries hoping to support the price of oil put off their decision on how much to reduce oil production until they negotiate with ally Russia on Friday on how much it will contribute to the cut.
12:57PM ( 8 minutes ago )
2 US warplanes crash off Japan; 1 dead, 5 missing
The U.S. military says one of two crew members recovered after two U.S. warplanes collided and crashed off Japan's coast is dead and five others remain missing
12:55PM ( 11 minutes ago )
The Latest: President lauds rescue efforts after Japan crash
President Donald Trump is thanking U.S. forces in Japan for their work trying to rescue crew members after two U.S. warplanes collided and crashed off the coast of Japan early Thursday
12:51PM ( 15 minutes ago )
Associated Press (AP)
The Latest: OPEC output decision delayed until Russia talks
Saudi Arabia's energy minister says OPEC nations have not yet been able to decide upon a possible production cut and is expressing skepticism about when an agreement will be reached.
12:39PM ( 27 minutes ago )
Israel calls for international response to Hezbollah tunnels
Israel's Netanyahu demands international response to Hezbollah tunnels on visit with ambassadors
12:17PM ( 49 minutes ago )
Texas bids Bush farewell with country music, funeral train
George H.W. Bush, president and patriarch, is home for Texas burial
12:04PM ( 1 hour ago )
AP Business
Tech execs at White House to field ideas for US dominance
Top executives from Google, Microsoft, IBM, Oracle and Qualcomm are planning to meet at the White House amid strained ties between President Donald Trump's administration and the tech industry
11:44AM ( 1 hour ago )
China demands Canada release executive of tech giant Huawei
China demands Canada release Huawei executive arrested in case that adds to technology tensions with Washington
11:41AM ( 1 hour ago )
The Latest: White House hosts tech execs Thursday
Top executives from Google, Microsoft, IBM, Oracle and Qualcomm are planning to meet at the White House amid strained ties between President Donald Trump's administration and the tech industry
11:23AM ( 1 hour ago )
AP Business - Economy
US to ease oil drilling controls protecting imperiled bird
The Trump administration is advancing plans to ease restrictions on oil and natural gas drilling and other activities on huge swaths of land in the American West that were put in place to protect an imperiled bird species
11:41AM ( 1 hour ago )
US officials move to ease Obama-era drilling restrictions
The Trump administration is advancing plans to ease restrictions on oil and gas drilling and other activities on huge swaths of land in the American West that were put in place to protect an imperiled bird species
9:32AM ( 3 hours ago )
UN rights office: Burundi's government has asked us to leave
UN human rights office says Burundi's government asks it to leave the country
8:25AM ( 4 hours ago )
AP Business - Industries
OPEC members expected to agree cut in crude production
OPEC members are meeting to agree on their response to recent declines in oil prices, with analysts predicting a cut in production of at least 1 million barrels per day
3:03AM ( 10 hours ago )
Residents head back into California town leveled by wildfire
Some residents of a California town devastated by a catastrophic wildfire nearly a month ago were finally allowed to return home to sift through the charred remains in search of precious family heirlooms, photos and other possessions
1:49AM ( 11 hours ago )
Hong Kong businessman guilty of bribery in African oil deal
Hong Kong businessman convicted of bribing leaders of Chad and Uganda to land oil rights for Chinese energy firm
6:18PM ( 18 hours ago )
AP Business - Utilities
2 US warplanes crash off Japan; 1 dead, 5 missing
The U.S. military says one of two crew members recovered after two U.S. warplanes collided and crashed off Japan's coast is dead and five others remain missing
12:55PM ( 11 minutes ago )
The Latest: President lauds rescue efforts after Japan crash
President Donald Trump is thanking U.S. forces in Japan for their work trying to rescue crew members after two U.S. warplanes collided and crashed off the coast of Japan early Thursday
12:51PM ( 15 minutes ago )
Prisoner swap deal adds to hopes for downplayed Yemen talks
U.N.-sponsored peace talks for Yemen begin in Sweden with Arab country's warring sides agreeing exchange prisoners
12:51PM ( 16 minutes ago )
UK leader may let Parliament decide on Brexit backstop
British Prime Minister Theresa May says she may let Parliament decide whether to trigger the controversial Northern Ireland "backstop" as she struggles to overcome opposition to her Brexit deal
12:50PM ( 16 minutes ago )
The Latest: Bush family heads to special funeral train
The family of George H.W. Bush is headed to a Union Pacific facility to join a special train that will carry the former president's casket to his final resting place
12:49PM ( 17 minutes ago )