NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

OPEC officials question upbeat outlook ahead of policy meeting

Published 27/11/2015, 13:53
© Reuters. A customer uses a petrol nozzle in a gas station in Nice

VIENNA (Reuters) - OPEC officials questioned an upbeat forecast from the group's researchers in a meeting ahead of next week's gathering of oil ministers, with some sceptical there will be a quick easing of the supply glut in 2016.

The comments point to a less jubilant mood in the Organization of the Petroleum Exporting Countries, whose oil ministers meet to set policy on Dec. 4, than during their last meeting in June. Oil has fallen to $45 (£30) a barrel on oversupply concerns compared to $65 last time.

"Market data is showing loads of uncertainties," said one source.

OPEC's national representatives - officials representing the 12 member-countries, plus officials from OPEC's Vienna secretariat - are meeting to discuss the market. The meeting, called the Economic Commission Board, is continuing on Friday for a second day.

A year ago, OPEC made its historic decision to refuse to prop up prices by cutting supply and focus on defending market share. The shift was led by Saudi Arabia, supported by other Gulf OPEC members. Doubts about the policy among less wealthy members are growing.

OPEC's research team expects higher demand for the group's oil in 2016 as supply from rival producers declines for the first time since 2007, reducing the global supply glut compared to 2015. [OPEC/M]

One of the differences in views being aired, an OPEC delegate said, is around whether this forecast is too optimistic, while another delegate was downbeat about the outlook. 

"No, it is not," the second delegate said, asked if the market outlook appeared better. "It is complicated."

"We think it will take a longer time for the market to go back to stability. Maybe another year and half," another delegate said before the ECB meeting.

Nonetheless, OPEC is widely expected to leave its current policy in place when ministers meet.

Delegates from Gulf OPEC members have made clear that any U-turn would be possible only if large producers outside OPEC, notably Russia, were to join coordinated output cuts. The chance of that happening currently looks slim.

© Reuters. A customer uses a petrol nozzle in a gas station in Nice

"I am not very optimistic any breakthrough will happen during the coming OPEC meeting," said a delegate from a country that wants supply cuts who is yet to arrive in Vienna. "I hope I will be proved wrong."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.