OPEC Expected to Cut Oil Production to Support Price

Vienna, OPEC countries were meeting to find a

way to support the falling price of oil, with analysts predicting the cartel

and some key allies, like Russia, would agree to cut production by at

least 1 million barrels per day.

Crude prices have been falling since October because

countries like the U.S. and Saudi Arabia are producing at high rates

and due to fears that weaker economic growth would dampen energy

demand. The price of both benchmark U.S. crude and the standard for

internationally traded oil fell 22 percent in November.

The oil minister of Saudi Arabia, the heavyweight within OPEC,

said today that the country was in favor of a cut of 1 million barrels a

day.

His Iraqi counterpart, Thamir Ghadhban, said: I am optimistic

that the agreement will stabilize the market, will stop the slide in the

price (of oil).

Investors did not seem convinced, however, and were pushing

the price of oil down sharply again today, partly due to broader

concerns that a trade war between the U.S. and China could escalate

and hurt global growth. The international benchmark for crude, Brent,

was down $2.91 at $58.65 a barrel.

The fall in the price of oil will be a help to many consumers, as

well as energy-hungry businesses, and U.S. President Donald Trump

has been putting pressure publicly on OPEC to not cut production.

Experts say this week’s meeting of the Organization of the

Petroleum Exporting Countries will influence the price of oil over the

coming months. How strongly it does so could depend on Russia’s

contribution, which will be determined in a meeting on Friday.

Analysts at Commerzbank estimate that if Russia is willing to

step up its production cuts, OPEC and non-OPEC countries could trim

production by a combined 1.3-1.4 million barrels a day. This would be

enough to rebalance the oil market next year, they wrote in a note to

investors, the Associated Press (AP) news reported.

Source: Oman News Agency

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