The Organization of Petroleum Exporting Countries Opec will hold a meeting in Austria this weekend. According to media reports, the organization is considering new cuts to oil production.
Oil exporting countries the expanded assembly, i.e. the Opec+ countries, will meet this weekend at their headquarters in Vienna, Austria. According to media reports, the meeting may again decide on new cuts to oil production.
According to sources from the Reuters news agency, production may be cut by up to one million barrels per day.
Investment bank RBC’s leading raw material strategist Helima Croft evaluates the news agency For Bloombergthat a production cut of up to a million barrels is the most likely outcome of the meeting.
According to Bloomberg’s other sources, however, the outcome of the meeting is still completely open. For example, Iran’s Opec representative Amir Zamanin told reporters, according to the news agency, that all options are still on the table.
Oil Organization last cut production at the beginning of April, then by a little over a million barrels per day. The April announcement temporarily raised the price of oil, and the prices of both the US WTI reference quality and the North Sea Brent reference quality oil futures rose above 80 dollars per barrel.
During May, oil futures prices have decreased. On Friday evening, the price of the WTI reference quality was just under 72 dollars per barrel, while the price of the North Sea Brent reference quality was just over 76 dollars per barrel.
Western countries have accused OPEC of manipulating the market price of oil with production cuts and keeping energy prices unnecessarily high. Iraq’s oil minister Hayan Abdel-Ghani told reporters in Vienna, according to Bloomberg, that the main task of OPEC and its allies is to maintain the stability of the oil market.
“We do not hesitate to make decisions that bring more balance and stability,” he said, according to the news agency.
According to Reuters, however, Abdel-Ghani on Saturday called for talks about one million barrels of production cuts prematurely. Representatives of the Opec countries will hold their meeting in Vienna on Saturday. On Sunday, the oil exporting countries will meet in the expanded Opec+ configuration.
Opec is essentially a cartel that agrees on the amount of its oil production with each other and with its allies in the expanded Opec+ configuration.
There are currently 13 Opec countries. They include Saudi Arabia, the United Arab Emirates, Iran, Iraq and Venezuela, which is considered the leading country in the alliance. The expanded composition includes a dozen other countries, the most important of which is Russia.
According to Reuters, the Opec+ countries produce about 40 percent of the world’s crude oil.
According to the news agency, a possible cut of around one million barrels to the countries’ oil production would increase the organization’s current production cuts to a total of almost 4.7 million barrels per day, which corresponds to 4.5 percent of global crude oil demand.
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