OPEC Could Cut Output After IEA Report Drew Comments from Saudi Arabia

Saudi Arabia has given oil traders the first glimmer of clarity on what it might take to prompt the world’s biggest crude exporter to change course on policy, suggesting that its laissez faire attitude may be wearing thin.

The Energy Intelligence newsletter reported on Thursday that Saudi Arabia is considering proposing that the Organization of the Petroleum Exporting Countries (OPEC) cuts output next year by 1 million barrels per day (bpd) and has determined participants and volumes on which a deal would depend — a surprise move that would be the Kingdom’s first definitive proposal since prices collapsed.

A Saudi oil source described media reports of such a proposal as “baseless”, and a separate source said the matter was not raised at an informal meeting of producers on Thursday.

Iraq, Iran and Russia, meanwhile, would appear to have torched any remote hopes of a cut being agreed at Friday’s OPEC meeting by rejecting the idea that they would reduce or limit output, as the mooted Saudi plan would require.

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