Lowering production to drive up oil prices. This is what could emerge from the statements of a delegate of the Organization of Petroleum Exporting Countries (OPEC), from one of the Gulf countries. The latter told Reuters that “the door is open to non-OPEC OPEC agreement.”
A global agreement so that would aim to drive up oil prices, which have plunged to the lowest since 2003. In parallel, the Russian Minister of Energy Alexander Novak, affirmed that Saudi Arabia would be willing to lower its oil production by 5%. This information has not been confirmed by Riyadh but it could mark the end of the fall in oil prices.
Meanwhile, Alexander Novak was ready to participate in discussions about an agreement between OPEC countries and those who are not members, including Russia. Despite skepticism of analysts, not that of Moscow, which pays a very high cost to the slump in the oil market in the direction of the cartel caused a stir among investors. Brent crude, the European benchmark, jumped above 35 dollars for the first time in three weeks.
Hope of an agreement
The drop in crude prices at such low levels penalizes much of the global economy. If the French purchasing power seems to gain, as well as an Indian billionaire, lower oil prices will reduce for the second consecutive year the investments in the oil sector, causing thousands of job cuts. The North Sea is particularly affected, as well as Total or the oil exporting countries, which sink into the crisis.
The mechanisms for this are known: return Iran and its 500,000 barrels per day, overproduction and a tendency of markets to overreact. The hope of an agreement between OPEC and outside OPEC countries to reduce inventories pushed crude prices. The US light crude (West Texas Intermediate, WTI) and Brent North Sea took more than 4% 16h
Source AFP
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