Only 5 Non-OPEC Producers to Attend Saturday’s Meeting

Only five of 14 non-OPEC oil producers have agreed so far to meet the group on Saturday for talks aimed at widening a deal to reduce output, casting doubt on whether OPEC will secure the full cuts it is seeking, two OPEC sources said.

The Organization of the Petroleum Exporting Countries, which finalised its first oil output cut in eight years last month to prop up prices, is to hold talks with non-member countries in Vienna in the hope that they will also limit supply.

The last time non-OPEC countries joined the organization in cutting output, in late 2001 as prices dropped in the aftermath of the Sept. 11 attacks, non-members promised cuts of 462,000 barrels per day, not quite the 500,000 bpd OPEC then sought.

Currently, Russia has said it will cut 300,000 bpd, meaning other non-OPEC producers combined will need to pledge the same amount to lower output by the 600,000 bpd OPEC wants – half the reduction OPEC is making.

Some OPEC sources familiar with discussions were reasonably sure the outside producers would deliver enough commitments.

“I think they will,” said one. “It should not be that difficult.”

Other OPEC sources were skeptical a pledge for the full amount would be made this time. Among the 14 non-OPEC countries invited to attend Saturday’s meeting, only Azerbaijan, Kazakhstan, Oman, Mexico and Russia have accepted.

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