BAKU, Azerbaijan, Dec.4
By Leman Zeynalova – Trend:
More pressure is expected on various oil exporters in the upcoming OPEC ministerial meeting to be held in Vienna, Austria, Dr. Gal Luft, co-director of the Institute for the Analysis of Global Security (IAGS) told Trend.
He pointed out that the problem with the existing cuts is not that they are not deep enough but that they are not implemented as agreed by some of the exporters.
“I don’t expect deeper cuts but an extension of the existing cuts into mid-2020. I do expect more pressure on the various exporters to meet their commitments in order for the full impact of the cuts to be realized,” noted Luft.
The expert said Saudis need to shore up prices ahead of the Aramco IPO in order to justify their revised valuation which is being contested by international investors.
“The problem with the timing of the meeting is that it clouded by the stalemate in the US-China trade talks. The deal which was supposed to be signed last month in Santiago is still in the making and the uncertainty about future demand continues. This has quite an impact on the fundamentals as well as on inventories,” he added.
In late 2018, OPEC and a number of countries outside this organization (OPEC+ format) decided to modernize the terms of the agreement on the reduction of oil production, in force from the beginning of 2017. The countries agreed to reduce the total production by 1.2 million barrels per day from the level of October 2018.
On July 2, 2019, a decision was made in Vienna to extend the agreement on reducing oil production by OPEC member and non-member states until the end of the first quarter of 2020.
The 177th Meeting of the OPEC Conference is expected to be held December 5, 2019, followed by the 7th OPEC and non-OPEC Ministerial Meeting on December 6 in Vienna, Austria.
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