At a time when the current dive in black gold prices is in the midst of a price collapse, as in 2014, the Energy Ministers of Russia, Saudi Arabia, Kuwait, Venezuela and the United Arab Emirates meet, Sunday, November 11, at Abu Dhabi to study the possibility of a return to production limitations. However, no decision should be taken, but recommendations should be made before a plenary meeting of the Organization of the Petroleum Exporting Countries (OPEC) scheduled for December in Vienna.
Decreased between a rise in production in some large producing countries and fears of falling demand, oil prices fell by almost 20% in a month, after reaching the highest level in early October. level for four years. The price of a barrel of Brent spent Friday under the $ 70 mark for the first time since April and the New York WTI barrel below $ 60 for the ninth month in a row.
Despite signs of decreasing demand, Saudi Arabia, Russia, Kuwait and Iraq have recently increased their crude oil production and the United States, shale oil.
The recent decline in oil prices is partly due to the decline in demand in China, the largest importer, which is experiencing a slowdown in growth, said Cailin Birch, an analyst at the Economist Intelligence Unit. In addition, US sanctions against Iran, which threatened to diminish global supplies and increased prices, were less severe than expected.
Regarding the agreement
In the context of US sanctions, Moscow and Riyadh, two of the three largest producers in the world, modified their production limitation agreement in June to extract and offset a drop in Iranian oil exports. Since December 2016, OPEC countries, led by Saudi Arabia and other non-cartelists, including Russia, have been implementing an agreement to cut black gold production.
At the Sunday meeting of the Joint Ministerial Commission to oversee the agreement, they intend to address the decline in production. Riyadh increased production of 9.9 million barrels per day in May to 10.7 million barrels per day (bpd) in October, according to Saudi Minister of Energy, Khaled Al-Faleh.
According to Fawad Razaqzada, an analyst at Forex.com, the authorities will probably argue "The need for a 100% return on compliance with the agreement"after Washington's decision to grant exemptions to eight Iranian oil importers. "Prices are falling as the production of leading producers, such as Saudi Arabia, Russia and the United States, continues to increase, exceeding the amount of Iranian lost barrels"he explained.
If the producers "They have not demonstrated their intention to reverse the last increase in production, oil prices may plunge even more", warned Friday, analysts Commerzbank.