OPEC Starts Meeting on Implementing Supply Cut

OPEC officials began talks in Vienna on Friday aimed at working out details of their oil supply-cut agreement, which they concede is looking more complicated by the day.

The meeting of the High Level Committee is comprised mainly of OPEC governors and national representatives – officials who report to their respective ministers.

Last month in Algiers, the Organization of the Petroleum Exporting Countries agreed to reduce production of crude oil to a range of 32.50 million to 33.0 million barrels per day, its first output cut since 2008, to prop up prices.

The deal faces potential setbacks from Iraq’s call for it to be exempt and from countries including Iran, Libya and Nigeria whose output has been hit by sanctions or conflict and want to raise supply.

“It is getting complicated,” an OPEC delegate said before the meeting began on Friday. “Every day there is a new issue coming up.”

Even so, other OPEC officials including Secretary-General Mohammed Barkindo have said they are optimistic a final deal will be reached.

“Our deliberations today – and tomorrow with some non-OPEC producers – could very well have fundamental ramifications for the market, as well as for the medium to long term of the industry,” Barkindo said in a speech at the meeting, according to a text provided by OPEC.

The committee does not decide policy and will instead make recommendations to the next OPEC ministerial meeting on Nov. 30, also in Vienna.

How much each of the 14 OPEC members will produce is one of the matters the committee is examining.

The meeting is scheduled to continue for a second day on Saturday when representatives from non-OPEC nations, which OPEC wants to curb supplies as well, will also attend.

Non-OPEC nations sending representatives to Saturday’s talks are Russia, Kazakhstan, Mexico, Oman, Azerbaijan, Brazil and Bolivia.

Reuters

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell