Saudi Arabia and Russia Reach No Oil Production Cut Deal

Impromptu talks between Saudi Arabia, fellow OPEC member Venezuela and oil powers Russia and Mexico yielded no agreement on Tuesday on how to address a growing oil glut, ending without any plan to cut output despite a collapse in prices.

In a day of shuttle diplomacy before OPEC’s output meeting in Vienna on Thursday, energy officials from non-members Russia and Mexico rushed to the Austrian capital to push OPEC kingpin Saudi Arabia on the 30 percent price fall since June.

Saudi has kept the market guessing about its response to crude’s fall amid rapidly rising U.S. shale output, but Tuesday’s talks had led to speculation in some quarters that Riyadh might back a coordinated cut involving non-OPEC members.

 
Venezuelan Foreign Minister Rafael Ramirez told reporters after the talks that while all sides agreed current prices were “not good” for producing countries, no coordinated output cuts were arranged on Tuesday.

“We discussed the situation in the market, we shared our points of view, we need to keep in contact and we agreed to meet again in three months,” Ramirez, who until recently was oil minister and president of state oil company PDVSA, said.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza