Opec may hold formal oil talks if members reach consensus in Algiers

Opec is close to reaching an agreement with producers outside the group on how to stabilise the market, Venezuelan president Nicolas Maduro said on Sunday.

Opec may convene an extraordinary meeting if the group’s ministers reach a consensus on oil markets at an informal gathering next week in Algiers, secretary general Mohammed Barkindo said, according to Algeria’s official news agency.

Mr Barkindo said he is “optimistic” about the informal session in Algiers to be held September 27 on the sidelines of a conference of the International Energy Forum, Algeria Press Service reported. He made his comments in Algiers after meeting the country’s energy minister, Nourredine Boutarfa, it said.

Opec is close to reaching an agreement with producers outside the group on how to stabilise the market, Venezuelan president Nicolas Maduro said on Sunday after talks with his counterparts from fellow Opec members Iran and Ecuador. A “definitive answer” for market stability could come this month, state oil company Petroleos de Venezuela wrote on Twitter, citing Mr Maduro.

Almost two years after Opec set a strategy to eliminate the global oil glut by pressuring rivals with lower prices, markets continue to struggle with excess supply and crude remains capped below US$50 per barrel. Opec plans to hold informal talks with competitor Russia in Algiers, fanning speculation that producers may agree on an output cap to shore up prices.

A freeze would be the group’s first decision to limit output since Opec adopted a Saudi-led plan in 2014 allowing members to pump more to protect market share from increased production from the US to Russia. Opec members and Russia failed to agree at a meeting in Doha in April to limit production after Iran declined to attend and Saudi Arabia refused to proceed without all of the Opec states participating.

“We are close to an agreement between Opec and non-Opec countries to stabilise the market,” Mr Maduro said, according to Petroleos de Venezuela. Mr Maduro held “positive discussions” with Ecuadorean president Rafael Correa and Iranian president Hassan Rouhani at the Summit of the Non-Aligned Movement, he said at a news conference in Venezuela.

Opec’s Algiers gathering will be a “meeting of consultation and not of decision-making”, unlike the group’s meeting in Oran, Algeria, in 2008, when it agreed to cut production, Mr Barkindo said Saturday, according to APS.

Saudi Arabia, Opec’s biggest producer, is willing to discuss a possible freeze, Khalid Al Falih, the country’s oil minister, said in an interview last month. Mr Al Falih said he doesn’t “believe that an intervention of significance is required” and doesn’t support a production cut. Iran insists it will be ready to decide on capping production once output recovers to what it was before international sanctions on the country were tightened in 2012.

The International Energy Agency trimmed projections for global oil demand next year by 200,000 barrels per day to 97.3 million per day, the Paris-based group said in a report earlier this month. The IEA reduced growth estimates for this year by 100,000 barrels per day to 1.3 million per day, citing a deceleration in China and India this quarter coupled with vanishing growth in developed economies.

business@thenational.ae

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Published: September 19, 2016 04:00 AM

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