Just as we head into the all important OPEC Meeting, some feel Saudi Arabia has once again declared a war on oil prices.
OPEC officials failed to resolve internal differences that stand in the way of an agreement to cut oil production, while Russia dimmed the prospects for a broader deal to revive prices by saying it’s not planning to attend crucial talks on Wednesday.
With just one day left before ministers from the Organization of Petroleum Exporting Countries meet to finalize the first decline in production in eight years, the foundations for a deal were looking increasingly shaky on Tuesday, Bloomberg noted.
OPEC deal failure may push oil prices below $40/bbl, Algerian state news agency APS said Saturday, citing Algerian Energy Minister Noureddine Boutarfa after meeting with Iranian counterpart in Tehran this weekend.
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Late last week, the Saudi’s released a tactical letter while at the same time turned up pressure on some OPEC members (Iran and Iraq).
Saudi Arabia told the producer group it will not attend talks on Monday with non-OPEC producers to discuss limiting supply, as it wants to focus on having consensus within the organization first.
On the eve of the 171st Ordinary OPEC Meeting to take place on November 30 in Vienna of Austria, in classic fashion the Saudi’s have thrown another curve ball the global oil production leaders. Just as the world’s major producers and exporters of crude oil are preparing to adopt one of the most historic decisions on freezing oil prices, Saudis seem to have reneged on earlier promises.
Eight years of an easy money gravy train (courtesy of mad central bankers) has provided leverage which has turned supply – demand oil market relationships upside down. Low cost debt has funded non-OPEC oil production globally, the surge has been colossal. The Saudi’s have done anything and everything they could to increase production, maintain market share.
Oil debts are so HIGH globally that the cheating factor is equally elevated, this has thoroughly annoyed the Saudi’s.
The Vienna meeting was supposed to include plans to discuss the contribution that producers outside OPEC will make to a proposed supply-limiting agreement. OPEC oil ministers meet on Wednesday in an effort to finalize their deal.
Hopes were high that OPEC would cement a preliminary September agreement in Algeria that would reduce its production to between 32.5 million and 33 million barrels per day, its first supply curb since 2008.
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