OPEC meet Friday to discuss oil production cut

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Thursday 03 Dec 2015 - 14:17 Makkah mean time-21-2-1437 Vienna, (IINA) - Organization of the Petroleum Exporting Countries (OPEC) will gather in Vienna on Friday to decide on whether to trim the group’s oil output to face the global supply glut, low prices and weak demand growth, Middle East Eye reported. According to a survey by Bloomberg, OPEC production in November rose to 32.12 million barrels per day. “We have a meeting on Friday, we will discuss all these issues. We will listen and then decide”, Saudi Arabia's oil minister Ali Al-Naimi told reporters upon arrival on Tuesday in the Austrian capital. At its last regular meeting in June, OPEC defied calls to cut output despite the low oil price, extending what is now a year-long strategy of attempting to preserve market share and fend off competition from oil extracted from North American shale.  "Saudi Arabia and its close Gulf allies Kuwait, Qatar and the United Arab Emirates account for more than half of OPEC's output of 31.5 million barrels per day, and others in OPEC cannot force them to cut output", IHS Energy said in a report. "Without the Gulf group, there can be no effective OPEC agreement". However, the policy of maintaining high output has contributed to prices slumping from above $100 a barrel in mid-2014 to between $40 and $45 currently. This has caused much friction within OPEC, with poorer members such as Venezuela suffering severely from a collapse in income. "The pressure is growing on Saudi Arabia to cut production after it convinced the group to keep oil output high in order to maintain market share and presumably squeeze shale and other weaker producers out of the market", noted Fawad Razaqzada, an oil market analyst at Gain Capital trading group. The price situation could meanwhile worsen next year, when growth in global demand for crude is set to slow as the allure of cheap oil fades, the International Energy Agency said last month. Demand growth is also impacted by slowing economic growth in China, the world's biggest consumer of energy. Further downward pressure on oil prices is expected to come from OPEC member Iran ramping up exports as sanctions are lifted as part of July's nuclear deal with major powers. In addition, the expected rise in US interest rates later this month may boost the dollar and make oil priced in the US currency more expensive for holders of rival units, further denting demand. AG/IINA