Wednesday, 21 August, 2019

Oil prices slide as Trump urges OPEC not to cut supply

AUSTRIA Opec President and Energy Minister of the UAE Suhail al Mazrouei opens the 175th Opec Conference in Vienna on Wednesday.—AFP AUSTRIA Opec President and Energy Minister of the UAE Suhail al Mazrouei opens the 175th Opec Conference in Vienna on Wednesday.—AFP
Ginger Lawrence | 06 December, 2018, 09:16

Riyadh under pressure from Trump not to reduce output, Moscow resists deep cuts.

Russian Energy Minister Alexander Novak told reporters he had held a "good" meeting with his Saudi counterpart Khalid al-Falih on Wednesday and that they would have more talks.

During Thursday's meeting, OPEC leaders are expected to discuss how to stabilize crude oil production after USA prices plunged by 22-percent in November - making it the worst month since the financial crisis in 2008.

OPEC members will meet on Thursday and hold talks with allies such as Russian Federation on Friday.

"I think the likelihood is that they will cut crude production rate, maybe not as dramatically as some people would like, to try and meet a balance between what the USA would like and their own personal interests".

The Organization of Petroleum Exporting Countries and its allies are desperate to shore up oil prices after a slump of more than $20 a barrel since October.

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After the US granted waivers to eight of Iran's key oil buyers to continue importing Iranian oil at reduced volumes at least until early May 2019, Saudi Arabia and other OPEC members, as well as their key partner in the non-OPEC group, Russia, are now considering a new cut and a U-turn from their pump-to-compensate-for-Iran policy that started in June.

Iran is suffering both as a result of lower prices and a decline in its oil exports because of the USA sanctions.

Russia, Saudi Arabia and the United States have been vying for the position of top crude producer in recent years.

Oil prices have fallen by nearly a third since October to around $62 per barrel after Saudi Arabia raised production to make up for the drop in Iranian exports. But they're contending with vociferous opposition from the USA president, who's taken to using his Twitter account to berate the group's policies and sees low oil prices as key to sustaining America's economic growth.

However, when oil producers realized the sanctions fell far short of what had been expected, fears of oversupply followed.

Iranian oil minister has lashed out at United States special representative for Iran Brian Hook over his "meddlesome" meetings with members of the Organization of Petroleum Exporting Countries in Vienna, asserting that OPEC is an independent body that does not take orders from the US. Trump said on Twitter on Wednesday, Xinhua news agency reported. Trump has backed Saudi Crown Prince Mohammed bin Salman despite calls from many United States politicians to impose stiff sanctions on Riyadh.