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OPEC source: Back to cut production is not excluded in 2019

OPEC source: Back to cut production is not excluded in 2019

A leading source of Opec has not excluded the possibility of returning to an alliance of OPEC and non-OPEC producers to reduce oil production next year in order to avoid a potential supply gap that could put prices under pressure.
"Russia and Saudi Arabia have started bilateral talks in 2019 about possible reductions in oil production," said the source, commenting on a report from the Russian news agency TASS.
OPEC and its allies, including Russia, have decided in June to cut the production restrictions that have been in force since 2017, after pressure from US President Donald Trump to cut oil prices and offset the shortages of supplies from Iran.
"Certainly not the other way around", said a second deputy from the Organization of the Oil-exporting Countries (OPEC) in response to a question whether the talks point to a return to production reductions in 2019.
Oil prices are under downward pressure due to rising deliveries despite expectations of lower Iranian exports as a result of new US sanctions.
Predictions of supply surpluses slow down demand in 2019 in the market.
Brent crude oil fell from a peak of four years above $ 86 a barrel to $ 71 on Tuesday in October.
A ministerial committee of several OPEC members and its allies will meet in Abu Dhabi next Sunday to discuss the market situation and 2019 prospects.
A third OPEC source said that the group, called the Joint Ministerial Control Committee, could make a recommendation on the 2019 production policy until the next meeting, which would determine the production policy between OPEC's oil ministers and independent producers.
The meeting is scheduled for 6 to 7 December in Vienna. "Every serious discussion will take place during the December meeting," said the source.
The price of crude oil is the longest wave of declines since 2014, after the fear of a supply malaise dropped during US temporary waivers for eight sanctions on the Iranian oil imports and expectations of higher US production, reported Bloomberg news agency.
The US government expects oil production to rise at a record pace this year, as industrial data indicates an increase in US stocks last week.
At the same time, the exemptions granted by the United States to the G8 would enable Iran to continue to export part of its oil to its largest customer base for six months.
Concerns about a decline in inventories, which led to crude oil prices going up to a high point in four years last month, declined during speculation that the United States would reduce sanctions to lower oil prices at home.
"The exemptions granted to eight countries, which allow them to continue to buy Iranian oil temporarily, are still there." There are huge data on the increase in US crude oil production this year, more than ever, "quoted Steven Ines, an analyst at Wanda Financial Group. As well as the demand for OPEC to increase production.
In the United States, estimates from the government indicate that this year will be the largest annual increase in domestic crude oil production. According to the US Energy Information Administration, average production is expected to reach 10.9 million barrels per day this year, compared to 9.35 million in 2017, the highest ever rise.

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