The Organization of Petroleum Exporting Countries or OPEC meet this week on November 30 in Vienna, Austria for the 173-rd OPEC meeting. The event will see Russia, the largest non-OPEC nation joining hands with Saudi Arabia in deciding about extending the production cuts.
OPEC first agreed to curb production in 2016, marking the first oil cut in nearly eight years. The deal was designed to curb the building oil inventories as the previous decision to open the supplies saw crude oil prices falling sharply.
The initial move also saw Russia in cutting its own output.
Crude oil prices have stabilized since the first decision in 2016. Ahead of this week’s meeting, WTI crude oil futures were seen closing last week near the $60 a barrel mark. On Friday, Crude oil prices settled at $58.94, extending the gains for four consecutive days.
On Wednesday, the OPEC member nations and Russia will decide whether to extend the production cuts or not. According to the previous meeting, the oil production cut is expected to expire in March 2018.
As of the latest news reports, Russian and its OPEC partners are said to have agreed on a framework that will see oil cuts being extended. However, officials note that there are various options still available. Initially, Russia was hesitant to extend production cuts at the November meeting considering that the production cuts did not expire until the end of March.
However, that seemed to have changed with Russia willing to agree to the cuts but with some additional caveats. Russia’s energy minister, Alexander Novak was cited by news sources as saying that the goal for re-balancing the oil markets wasn’t met this year and as a result members were keen on reaching the final goals. “Russia also supports these proposals,” Novak said in an interview last Friday.
Until now, production cuts were levied on various OPEC member nations. However, if reports are to be believed, the new deal could see some changes. These include linking the production cuts to the supply and demand balance on the global markets. Other options were said to include making no changes at this week’s meeting but to reconsider the deal next year before the end of March.
