Doubts over oil production limits are returning. OPEC and other major oil producers keep talking and negotiating, with no substantial results. In a series of meeting this weekend, OPEC and Russia were talking about each country agreeing it won’t raise its oil production levels above a certain ceiling, instead of freezing it at current levels. Russia and Saudi Arabia ended the meeting without any specifics, but pledged to discuss action in Algiers later this month.
As a result oil prices fell Monday, for a second day running. Brent crude futures LCOc1 were down 60 cents at $47.41 a barrel.
Michael D. Cohen, an analyst at Barclays Plc (NYSE: BCS) in New York, explained in a statement, “The more they talk, the less people listen… If you look at the actual statements from the Saudis, there’s not a lot of enthusiasm. They’re saying that either they don’t believe a substantial intervention is needed right now or that if other producers want a freeze, they’ll go along.”
Algerian Energy Minister, Noureddine Bouterfa, made the situation sounding even worth when he was in Moscow, saying that “All the solutions are possible… “Iran has the right to increase production to the pre-sanctions level. It is also the right of Libya, Nigeria to increase.”
The meeting in the Algerian capital will take place on September 26-28 where all the International Energy Forum will be present, including 73 countries, which together constitute about 90% of the global demand and supply of oil and natural gas.