OPEC will hold informal talks at an energy conference in September, the cartel’s president said Monday, as oil-producing nations worry over a recent downturn in the crude market.
The Organization of the Petroleum Exporting Countries is constantly discussing ways to stabilize the market, said Qatar’s energy minister, Mohammed bin Saleh al-Sada, who is serving as the 14-nation oil cartel’s president this year.
“OPEC continues to monitor developments closely, and is in constant deliberations with all member states on ways and means to help restore stability and order to the oil market,” Dr. Sada said.
An informal meeting of OPEC member countries is scheduled to take place on the sidelines of the International Energy Forum in Algeria from Sept. 26-28, he said. The group had its most recent formal meeting in Vienna in June, and many of its members gathered last April for unsuccessful discussions on limiting production.
Dr. Sada sounded a positive note about the crude-oil market, saying demand was expected to be strong in the second half of 2016 while the global supply of petroleum would weaken.
“Expectation of higher crude oil demand in the third and fourth quarters of 2016, coupled with decrease in availability, is leading the analysts to conclude that the current bear market is only temporary and oil price would increase during later part of 2016,” he said.
Several OPEC members want to revive the idea of setting new limits on oil production this fall as Iran regains much of the energy-industry might it lost during the years of Western sanctions, The Wall Street Journal reported last week.
The nations—which include Venezuela, Ecuador and Kuwait—want to take another stab at cooperation with non-OPEC members like Russia.
A similar initiative died back in April during talks in Doha, Qatar, when Saudi Arabia backed out over Iran’s refusal to join in a so-called production freeze until it had reached pre-sanctions levels of oil production. Under the freeze, countries would have agreed to limit their production to certain levels in a bid to raise oil prices by constricting the amount of crude on the market.
The renewed talk of an oil-production freeze comes as crude prices remain stuck at levels far below what most OPEC nations need to balance their budgets.
The price of Brent crude, which sets the international oil benchmark, was up 1.4% cents at $44.91 a barrel Monday, below this year’s high of near $53 a barrel in June.
The production freeze was an idea that had helped send prices rallying more than 50% from 12-year lows last winter.
Some OPEC delegates said they don’t expect a decision or recommendation to be made during the side meetings in Algeria.
Much would depend on whether Russia participates.
Russian Energy Minister Alexander Novak said Monday that Moscow would be willing to discuss a freeze with OPEC if prices fall further.
“We have always taken the position that we are ready for negotiations,” Interfax reported Mr. Novak as telling journalists.
He also said that he could meet his Saudi counterpart, Khalid al-Falih, in September.
By Summer Said
Source: Wall Street Journal
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