Saudi Arabia works on convincing Russian Federation to join oil cuts

Ivan Schwartz
December 6, 2018

The group could eventually agree to remove about 1 million barrels a day, about 1 percent of global output, from the market, Al Rumhy said. "I am optimistic. There will be a deal, but it is unclear how much Opec and how much non-Opec will contribute".

"Russia, a major oil producer but not a member of OPEC, will meet with the producer cartel on Friday to discuss production levels, and it is widely expected that a supply cut will be agreed". A delegate from another country said some members believe a smaller reduction would be adequate.

Trump, who has made the USA economy one of his top issues, has frequently complained about OPEC this year, as higher crude oil prices have in turn raised fuel prices for consumers and businesses.

Oil prices fell along with weak stock markets on Thursday, but trading was tepid ahead of a meeting by the Organisation of the Petroleum Exporting Countries (OPEC).

The slide in USA oil followed a tumble in global stock markets on Tuesday and Wednesday, with investors anxious about the threat of a widespread economic slowdown.

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Led by Saudi Arabia, OPEC's crude oil production PRODN-TOTAL has risen by 4.1 per cent since mid-2018, to 33.31 million barrels per day (bpd).

The uncertainty over possible production cuts caused oil prices to dip on Wednesday as investors wait on a decision. US President Donald Trump threatened on Tuesday to place "major tariffs" on Chinese goods imported into the United States if his administration didn't reach a desirable deal with Beijing.

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

The United States is not part of any output-limiting initiative due to its strict anti-trust legislation and fragmented oil industry.

While ministers met in OPEC's Vienna headquarters, Trump tweeted that the "world does not want to see, or need, higher oil prices!" Washington also gave sanctions waivers to some buyers of Iranian crude, further raising fears of an oil glut next year. Trump said on Twitter on Wednesday, Xinhua news agency reported. "We have to get the non-OPEC countries on board". "Being too cautious on the words, to please President Trump, runs however the risk of diluting the message", said Olivier Jakob from Petromatrix consultancy.

Other reports by GizPress

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