Vienna – OPEC in Vienna on Thursday took its most important decision and the most uncertain for years, the cartel facing a difficult choice between reducing its production ceiling to try to stop the oil drop, or simply maintain, possibly committing to better respect it.
The ministers of the twelve countries of the Organization of Petroleum Exporting Countries must be in the morning at its headquarters, located in the Austrian capital, to develop a compromise.
After years of stagnation between 100 and 120 dollars, the price of Brent crude fell by more than 30% since June, its biggest slump since the end of 2008.
Brent (reference oil market) and the US WTI thus plunged this month to their lowest levels in four years, around $ 75 a barrel.
Some of the oil cartel, Venezuela in mind, undermined by the financial meltdown, advocate a reduction of the collective production ceiling of OPEC, set for three long years to 30 million barrels per day
-. Discussions with Russia –
A measure that would help reduce the excess supply in the oil market, currently overcapacity due to the surge in US oil production (with shale oil extraction, including ), coupled to the current economic slowdown in Europe and China, which slows the consumption of black gold.
The production ceiling is the main tool of OPEC to regulate the global oil supply. But the lower would have the disadvantage for the cartel to lose market share to its members to other producing states, unless the latter are willing to apply similar measures.
Several cartel members, including Venezuela and Iran, thus called to work with off-OPEC oil countries to rebalance the market. And a meeting with representatives of Russia and Mexico, both non-OPEC countries, has also held Tuesday in Vienna, but lead to a general decline in production.
The other option, which has the support of OPEC leader, the Saudi Oil Minister Ali al-Nuaimi, would raise his back while waiting for the storm subsides, and thus maintain the production ceiling at its . current level
The market will eventually stabilize, he was launched on Wednesday to reporters and showering hopes for a reduction of the cap
-. Necessary adjustments –
On Tuesday and Wednesday, the OPEC ministers have stepped face to face interviews to try to draft a compromise, and multiplied reassuring statements, but the greatest uncertainty continued to reign just hours before the start of the meeting.
I have confidence that OPEC will be able to make a decision in a very unified, said Wednesday evening Mr. Al-Nuaimi, without specifying which side the balance was.
His Algerian counterpart, Youcef Yousfi has meanwhile assured that the cartel was seeking a consensual and stable solution, which provides the necessary adjustments (face) to market imbalances.
In the absence of a reduction in the ceiling, an intermediate solution mentioned by analysts, would be to maintain the ceiling, but to commit to be applied with more discipline, just to calm down investors.
OPEC indeed exceed the required level (they all pumped 30.6 million barrels per day in October, according to estimates from the International Energy Agency).
(© AFP / November 27, 2014 4:01)
(AFP / 27/11/2014 4:04) ^ ->
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