Members of the Organization of countries-exporters of oil (OPEC) for the first time since 2008 and agreed to limit oil production. This was largely due to the softening of the position of Saudi Arabia. This decision was taken in a closed meeting in Algeria, reported Reuters, citing two anonymous sources familiar with the situation.
According to journalists, the OPEC countries had reached an agreement on the limitation of oil production to the level of 32.5 million barrels a day. This is 2.7% less than it was before – 33,4 million barrels per day. The agreement will begin in November of this year.
To achieve this objective, the cartel will turn to other countries-exporters of oil for accession to the agreement. According to the Agency, at the next meeting, which will be held in November, OPEC will discuss the freezing of oil production of each individual member of the cartel
Based on the news value of the futures on Brent crude for delivery in November 2016 on the ICE exchange in London rose by 4.6% to 48.35 per barrel. The maximum growth of oil was $ 48.93 per barrel (+5,9%).
In Algiers from 26 to 28 September was held XVTH international energy forum. The event was attended by representatives of member countries of OPEC and Russia, and also representatives of other countries as secureline players. Official information about the results of the consultative meeting of OPEC will be announced at the final press conference.
The agreements about the freezing of oil production within OPEC at the level of 32.5 million barrels a day following talks in Algeria to look formal as their observance it is difficult to guarantee, and they are unlikely to be observed by all members of the cartel. This idea in a conversation with RBC was expressed by a senior analyst of Sberbank CIB Valery Nesterov.
Previously, on 28 September, the Minister of energy, industry and mineral resources of Saudi Arabia Khaled bin Abdul Aziz al-Faleh saidthat the balancing of oil prices at the current level is comfortable. In other words, growth in oil prices is not worth waiting, as soon fell would demand, he said.
While Khaled al-Faleh confirmed that an informal meeting of OPEC countries, which took place on Wednesday in the framework of the International energy forum in Algeria will not end in any formal agreement. Such an agreement, he said, can only be achieved on a planned session of the OPEC on November 30 in Vienna.
We will note, yesterday the Minister of energy of Russia Alexander Novak acknowledged that final decisions on an informal OPEC meeting in Algeria on September 28, most likely, will not be accepted, even if the parties come to a consensus. He told reporters on the sidelines of an energy forum in Algeria.
“Today we have heard statements by Ministers that they do not expect tomorrow’s decision-making. Tomorrow there will be consultations and exchange of views. Maybe even there was consensus, develop a common approach. But, as I understand, OPEC is required to hold a formal meeting in order to secure some solutions. So tomorrow will be the formal solutions exact. To be clear, what was discussed and what the opinion of the country converge in the majority,” he said.
The previous meeting on the question of freezing of oil production, which was attended by 18 countries, was held on 17 April in the Qatari capital Doha. Then they failed to agree because of the position of Tehran, which is directly in front of the summit refused to participate in negotiations.
According to the International energy Agency, from may to September the effect of the declining oil production in countries outside OPEC, is almost completely offset by a record production of cartel participants due to the high production in Saudi Arabia, Kuwait and the UAE, as well as increasing production Iran after the lifting of sanctions.