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| Saudi Arabia may be ready for oil production freeze to save OPEC | Saudi Arabia may be ready for oil production freeze to save OPEC |
| (about 1 hour later) | |
| Oil prices edged towards $50 per barrel as Riyadh signals it is ready for a crude production quota at the OPEC meeting in Vienna on Thursday. During the meeting, the Saudi Energy Minister said Riyadh wouldn’t be increasing capacity now, but would not rule it out in the future. | |
| However, a move to freeze output is likely to meet with opposition from Iran. | However, a move to freeze output is likely to meet with opposition from Iran. |
| Saudi Arabia backing a 32.5 million barrels per day (bpd) ceiling may also be an attempt to repair relations with Nigeria, Algeria, Venezuela and other OPEC members. Some are reportedly angry with Riyadh for backing out of a production freeze deal between major crude exporters in April. Particularly, those countries whose economies were especially hard-hit by sliding crude prices. | Saudi Arabia backing a 32.5 million barrels per day (bpd) ceiling may also be an attempt to repair relations with Nigeria, Algeria, Venezuela and other OPEC members. Some are reportedly angry with Riyadh for backing out of a production freeze deal between major crude exporters in April. Particularly, those countries whose economies were especially hard-hit by sliding crude prices. |
| "The Gulf Cooperation Council is looking for coordinated action at the meeting," a senior OPEC source told Reuters, referring to Saudi Arabia and its allies Qatar, Kuwait and the United Arab Emirates. | "The Gulf Cooperation Council is looking for coordinated action at the meeting," a senior OPEC source told Reuters, referring to Saudi Arabia and its allies Qatar, Kuwait and the United Arab Emirates. |
| Tehran has been skeptical about any coordinated production ceiling, as it’s aiming to reach pre-sanctions level of production at 4 million (bpd). Iranian Oil Minister Bijan Namdar Zanganeh said that could be done “very soon,” but Iran sees no benefit in a collective quota, and wants an individual approach. | Tehran has been skeptical about any coordinated production ceiling, as it’s aiming to reach pre-sanctions level of production at 4 million (bpd). Iranian Oil Minister Bijan Namdar Zanganeh said that could be done “very soon,” but Iran sees no benefit in a collective quota, and wants an individual approach. |
| The deal between Saudi Arabia and Iran is unlikely due to the political crisis when Riyadh severed diplomatic ties with the Islamic Republic in January. | The deal between Saudi Arabia and Iran is unlikely due to the political crisis when Riyadh severed diplomatic ties with the Islamic Republic in January. |
| The news that Saudi Arabia is open to cooperation, temporarily pushed Brent crude prices above $50 per barrel on Thursday, while US benchmark WTI traded above $49. | The news that Saudi Arabia is open to cooperation, temporarily pushed Brent crude prices above $50 per barrel on Thursday, while US benchmark WTI traded above $49. |
| At its previous meeting in December, OPEC failed to set any official output ceiling, allowing its 13 members to pump as much as they wanted. | At its previous meeting in December, OPEC failed to set any official output ceiling, allowing its 13 members to pump as much as they wanted. |
| As a result, prices plummeted to 12-year lows of $27 per barrel in January, but have since come back to around $50 due to supply outages and rising demand. | As a result, prices plummeted to 12-year lows of $27 per barrel in January, but have since come back to around $50 due to supply outages and rising demand. |