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Oil Prices Weaken as OPEC Dithers Over Production
Oil futures could slide as much as 33% this autumn if the Organization of the Petroleum Exporting Countries again fail to reach agreement about reducing output, The Wall Street Journal reports.
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Oil futures could slide as much as 33% this autumn if the Organization of the Petroleum Exporting Countries again fail to reach agreement about reducing output, The Wall Street Journal reports.
Petroleum prices have been stuck at or below $45 per barrel for months as the cartel’s 14 members continue to disagree over schemes to curb production. Oil ministers will meet this week on the sidelines of a conference in Algiers to try again. The group’s next official meeting isn’t scheduled until the end of November.
OPEC’s ability to control oil prices has been weakened since new sources of crude, notably from U.S. shale deposits, have flooded the market. Now the group’s members fear that freezing or pumping less petroleum will only cede market share to the newcomers. Saudi Arabia, the cartel’s biggest producer, has pushed its own output to record levels in spite of low oil prices.
The Journal says the cartel is considering four options, all of them calling for members and Russia to freeze output at levels reached earlier this year. Iran is particular has resisted any move to restrict its production to pre-sanction levels. OPEC members Libya and Nigeria also have indicated they would want an exemption to a production freeze because their outputs are already below traditional norms.
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