Crude Falls as Saudis Deny Production Cut Agreement

Saudi Arabia is seen rejecting calls from fellow OPEC members to cut output when the group meets this week as the group’s kingpin argues it cannot deal alone with one of the most severe oil gluts in history.

OPEC is widely expected to stick to its policies – enforced by Saudi Arabia’s oil minister Ali al-Naimi a year ago – of defending market share by pumping record volumes to drive rival, higher-cost producers out of the market.

“I hope this time it will be different, but I doubt it will be,” said an OPEC delegate from a country usually seeking production cuts.

Three other delegates said they still saw no indication an agreement on cuts was likely to be reached on Friday.

While the Saudis can claim a partial victory over the U.S. shale oil boom, production from top non-OPEC rival Russia has kept surprising on the upside and its own members Iraq and Iran are set to add new barrels. World oil stockpiles are at a record, according to the International Energy Agency.

Venezuelan President Nicolas Maduro on Wednesday said his country, one of OPEC’s traditional price hawks, would push for a 5 percent output cut at the Friday meeting. OPEC is producing some 1.7 million barrels per day above ceiling.

via Reuters

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

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