After a full day of side and official talks in the Austrian capital, Vienna, the ministers of the Organization of the Petroleum Exporting Countries (OPEC) are still looking for an agreement to face the fluctuations in the oil market, which was greatly affected during the current year by the uncertainty about the growth of the global economy, which made oil prices lose. About 40% of its value since the beginning of the year.
Although OPEC had reached a mandatory agreement with its allies outside the organization last October to reduce production by about two million barrels per day, which is valid until the end of 2023; However, some countries, such as Saudi Arabia, Russia, Oman, Iraq, Kuwait, the Emirates and Algeria, made voluntary cuts of about 1.6 million barrels per day, starting from May until the end of this year, in addition to what they agreed upon in October.
Oil prices rose as the market awaited the “OPEC +” meeting in Vienna
According to sources I spoke to “Al Sharq”; The ministers are open to a scenario for a new reduction in production, bearing in mind that there is no agreement on a specific number for this reduction so far, especially since some countries that have made voluntary cuts do not express any desire to increase their cuts beyond what they have provided so far.
Mass reduction in oil production
The sources added that “OPEC” will discuss today, Sunday, with the rest of the countries in the “OPEC +” alliance, presenting a collective reduction that includes all countries to support market stability, as countries cannot proceed with the agreement without everyone entering into it. Among the ideas put forward; Converting voluntary cuts into mandatory ones, counting them as part of the new agreement, and inviting other countries to join them.
In the event that “OPEC” and its allies do not reach a new agreement to reduce production, the current agreement to reduce 2 million barrels per day and the voluntary reduction of about 1.6 million barrels per day will remain the only option, as work under these cuts is still valid until the end of the year.
Oil is heading for a weekly decline before the “OPEC +” meeting on supplies
The “OPEC +” alliance faces this year a wave of challenges on both sides of supply and demand, as economic growth in China continues to disappoint the market, while it is expected that the growth of production from outside the organization, especially from the United States, in which the number of drilling rigs declined for several consecutive weeks. .
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