attempt for oil-cut deal under way, prospects slim
Send a link to a friend
[January 27, 2016]
By Alex Lawler and Rania El Gamal
LONDON/DUBAI (Reuters) - OPEC is renewing
efforts among members and producers from outside the group for a deal to
fix an oil glut and boost prices, but it is too early to say whether the
attempt will work, OPEC sources said on Wednesday.
Such a deal has been mooted and dismissed for over a year and the
lack of any supply restraint by the Organization of the Petroleum
Exporting Countries and rivals such as Russia has helped send prices
to a 12-year low close to $27 a barrel.
Hopes were raised on Tuesday when Iraq's oil minister said top OPEC
producer Saudi Arabia and Russia were showing new signs of
flexibility about agreeing to tackle the oversupply in the market.
And Venezuelan President Nicolas Maduro announced on Tuesday that
the country's oil minister would tour OPEC and non-OPEC countries in
a bid to drum up support for joint action.
OPEC delegates, including those from Gulf countries, speaking after
Iraq's comments, said Venezuela's attempt to get everyone around the
table for a deal faced challenges.
"Something is cooking but it might not be done fast. There is
communication within OPEC trying to get all sides together," one
OPEC source said. "But the main challenge is Iran and Russia."
Moscow, seen as key to any agreement, has so far refused to
cooperate. OPEC member Iran is pressing ahead with plans to boost
its oil supply after international sanctions against it were lifted
earlier this month.
A second OPEC source said he did not know whether Venezuela's latest
initiative would succeed, but he hoped for an agreement to lift
"I have no idea. I am looking for something to have a fair price,
which will last," the source said.
Venezuela has also requested an emergency OPEC meeting and the
current OPEC president, Qatar's Energy Minister Mohammed al-Sada, is
seeking feedback from members on whether to hold one.
[to top of second column]
"The president is still awaiting answers," the second OPEC source
On Monday, senior officials from OPEC and Russia stepped up vague
talk of possible action. But Moscow said on Wednesday that while
Russia talks regularly to various countries about the oil market, it
was too early to speak of joint action.
"At the moment one cannot speak of coordinating actions in a
practical sense," Kremlin spokesman Dmitry Peskov said.
A third OPEC delegate said he doubted OPEC would be able to reach an
agreement with outside producers, citing the failure of previous
attempts. In 2001, Russia pledged to join supply cuts with OPEC but
"I still don't think that any real joint action between OPEC and
non-OPEC is going to happen because of old trust issues," the
(Editing by Dale Hudson)
[© 2016 Thomson Reuters. All rights
Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.