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OPEC makes last-ditch bid to save oil deal as tensions grow

Reuters  |  VIENNA 

By Rania El Gamal and Alex Lawler

VIENNA (Reuters) - was trying on Monday to rescue a deal to limit output as tensions grew among the producer group and non-member Russia, with top exporter saying markets would rebalance even without an agreement.

A gathering of experts failed to reach a compromise on how exactly the Organization of the Petroleum Exporting Countries should reduce production when it meets on Nov. 30, according to several sources briefed on the matter.

After more than nine hours of talks, Iran and Iraq continued to insist on higher output numbers, said the sources, who were not allowed to speak publicly about the matter.

Meanwhile, the Algerian and Venezuelan ministers were travelling to Moscow on Monday in a final attempt to persuade to take part in cuts instead of merely freezing output, which has reached new highs in the past year.

In September, OPEC, which accounts for a third of global production, agreed to cap output at around 32.5-33.0 million barrels per day versus the current 33.64 million bpd to prop up prices, which have more than halved since mid-2014.

The on Nov. 30 had been expected to rubber-stamp that deal, with and some other non-producers such as Azerbaijan and Kazakhstan also contributing.

But doubts emerged in recent weeks as OPEC's No.2 and 3 producers, Iraq and Iran, expressed reservations about the mechanics of output reductions and voiced concern about Russia's willingness to cut.

Over the weekend, Saudi Energy Minister Khalid al-Falih said markets would rebalance even without an output-limiting pact. He had previously said Riyadh was keen for a deal.

On Friday, cancelled an experts with non-producers scheduled for Nov. 28 after said the organisation needed to sort out its differences first.

Russia, which like depends heavily on revenues, said on Monday it remained keen to coordinate action with but refrained from stating whether it was prepared to cut output.

The Kremlin said President Vladimir Putin spoke to Iranian President Hassan Rouhani and both highlighted "the importance of OPEC's efforts to cap production as a key measure to stabilise global markets".

"NOBODY KNOWS"

Doubts about OPEC's ability to deliver promised cuts sent Brent crude down 2 percent initially on Monday to less than $47 a barrel.

Prices later recovered to trade up 2.5 percent after Iraq's minister said he remained optimistic that a deal could be clinched on Wednesday. [O/R]

Some analysts including Morgan Stanley and Macquarie have said prices will correct sharply if fails to reach a deal, potentially going as low as $35 per barrel.

As experts turned up at the group's headquarters on Monday, one delegate who had previously stated that a deal would be done, said this time: "I am not sure."

Another delegate, when asked about the prospects for a deal, said: "Nobody knows yet".

Iraqi Minister Jabar Ali al-Luaibi, upon arrival in Vienna, declined to say whether Iraq was ready to cut output: "We hope we (will) have agreement. We will cooperate with members to reach agreement acceptable to all."

Saudi Arabia's Falih was not expected to land before Tuesday evening, leaving little time for traditional pre-discussions with peers.

Iranian semi-official agency MEHR published an editorial on Sunday accusing of declaring a new "war on prices" and saying the Saudi position had changed because of infighting in the royal family.

The tone contrasted with Iranian agencies' more upbeat coverage of OPEC's informal in September in Algeria, when the initial deal was reached.

As prospects for a deal on Wednesday faded, some veteran players urged the group to do its utmost to achieve the first output-limiting deal since 2008 in order to stay relevant.

"needs to wake up instead of playing a game of who will cry first," said former Qatari energy minister and president Abdullah al-Attiyah.

(Additional reporting by Ahmad Ghaddar, Vladimir Soldatkin and Andy Critchlow; Writing by Dmitry Zhdannikov; Editing by Dale Hudson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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OPEC makes last-ditch bid to save oil deal as tensions grow

VIENNA (Reuters) - OPEC was trying on Monday to rescue a deal to limit oil output as tensions grew among the producer group and non-OPEC member Russia, with top exporter Saudi Arabia saying markets would rebalance even without an agreement.

By Rania El Gamal and Alex Lawler

VIENNA (Reuters) - was trying on Monday to rescue a deal to limit output as tensions grew among the producer group and non-member Russia, with top exporter saying markets would rebalance even without an agreement.

A gathering of experts failed to reach a compromise on how exactly the Organization of the Petroleum Exporting Countries should reduce production when it meets on Nov. 30, according to several sources briefed on the matter.

After more than nine hours of talks, Iran and Iraq continued to insist on higher output numbers, said the sources, who were not allowed to speak publicly about the matter.

Meanwhile, the Algerian and Venezuelan ministers were travelling to Moscow on Monday in a final attempt to persuade to take part in cuts instead of merely freezing output, which has reached new highs in the past year.

In September, OPEC, which accounts for a third of global production, agreed to cap output at around 32.5-33.0 million barrels per day versus the current 33.64 million bpd to prop up prices, which have more than halved since mid-2014.

The on Nov. 30 had been expected to rubber-stamp that deal, with and some other non-producers such as Azerbaijan and Kazakhstan also contributing.

But doubts emerged in recent weeks as OPEC's No.2 and 3 producers, Iraq and Iran, expressed reservations about the mechanics of output reductions and voiced concern about Russia's willingness to cut.

Over the weekend, Saudi Energy Minister Khalid al-Falih said markets would rebalance even without an output-limiting pact. He had previously said Riyadh was keen for a deal.

On Friday, cancelled an experts with non-producers scheduled for Nov. 28 after said the organisation needed to sort out its differences first.

Russia, which like depends heavily on revenues, said on Monday it remained keen to coordinate action with but refrained from stating whether it was prepared to cut output.

The Kremlin said President Vladimir Putin spoke to Iranian President Hassan Rouhani and both highlighted "the importance of OPEC's efforts to cap production as a key measure to stabilise global markets".

"NOBODY KNOWS"

Doubts about OPEC's ability to deliver promised cuts sent Brent crude down 2 percent initially on Monday to less than $47 a barrel.

Prices later recovered to trade up 2.5 percent after Iraq's minister said he remained optimistic that a deal could be clinched on Wednesday. [O/R]

Some analysts including Morgan Stanley and Macquarie have said prices will correct sharply if fails to reach a deal, potentially going as low as $35 per barrel.

As experts turned up at the group's headquarters on Monday, one delegate who had previously stated that a deal would be done, said this time: "I am not sure."

Another delegate, when asked about the prospects for a deal, said: "Nobody knows yet".

Iraqi Minister Jabar Ali al-Luaibi, upon arrival in Vienna, declined to say whether Iraq was ready to cut output: "We hope we (will) have agreement. We will cooperate with members to reach agreement acceptable to all."

Saudi Arabia's Falih was not expected to land before Tuesday evening, leaving little time for traditional pre-discussions with peers.

Iranian semi-official agency MEHR published an editorial on Sunday accusing of declaring a new "war on prices" and saying the Saudi position had changed because of infighting in the royal family.

The tone contrasted with Iranian agencies' more upbeat coverage of OPEC's informal in September in Algeria, when the initial deal was reached.

As prospects for a deal on Wednesday faded, some veteran players urged the group to do its utmost to achieve the first output-limiting deal since 2008 in order to stay relevant.

"needs to wake up instead of playing a game of who will cry first," said former Qatari energy minister and president Abdullah al-Attiyah.

(Additional reporting by Ahmad Ghaddar, Vladimir Soldatkin and Andy Critchlow; Writing by Dmitry Zhdannikov; Editing by Dale Hudson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

OPEC makes last-ditch bid to save oil deal as tensions grow

By Rania El Gamal and Alex Lawler

VIENNA (Reuters) - was trying on Monday to rescue a deal to limit output as tensions grew among the producer group and non-member Russia, with top exporter saying markets would rebalance even without an agreement.

A gathering of experts failed to reach a compromise on how exactly the Organization of the Petroleum Exporting Countries should reduce production when it meets on Nov. 30, according to several sources briefed on the matter.

After more than nine hours of talks, Iran and Iraq continued to insist on higher output numbers, said the sources, who were not allowed to speak publicly about the matter.

Meanwhile, the Algerian and Venezuelan ministers were travelling to Moscow on Monday in a final attempt to persuade to take part in cuts instead of merely freezing output, which has reached new highs in the past year.

In September, OPEC, which accounts for a third of global production, agreed to cap output at around 32.5-33.0 million barrels per day versus the current 33.64 million bpd to prop up prices, which have more than halved since mid-2014.

The on Nov. 30 had been expected to rubber-stamp that deal, with and some other non-producers such as Azerbaijan and Kazakhstan also contributing.

But doubts emerged in recent weeks as OPEC's No.2 and 3 producers, Iraq and Iran, expressed reservations about the mechanics of output reductions and voiced concern about Russia's willingness to cut.

Over the weekend, Saudi Energy Minister Khalid al-Falih said markets would rebalance even without an output-limiting pact. He had previously said Riyadh was keen for a deal.

On Friday, cancelled an experts with non-producers scheduled for Nov. 28 after said the organisation needed to sort out its differences first.

Russia, which like depends heavily on revenues, said on Monday it remained keen to coordinate action with but refrained from stating whether it was prepared to cut output.

The Kremlin said President Vladimir Putin spoke to Iranian President Hassan Rouhani and both highlighted "the importance of OPEC's efforts to cap production as a key measure to stabilise global markets".

"NOBODY KNOWS"

Doubts about OPEC's ability to deliver promised cuts sent Brent crude down 2 percent initially on Monday to less than $47 a barrel.

Prices later recovered to trade up 2.5 percent after Iraq's minister said he remained optimistic that a deal could be clinched on Wednesday. [O/R]

Some analysts including Morgan Stanley and Macquarie have said prices will correct sharply if fails to reach a deal, potentially going as low as $35 per barrel.

As experts turned up at the group's headquarters on Monday, one delegate who had previously stated that a deal would be done, said this time: "I am not sure."

Another delegate, when asked about the prospects for a deal, said: "Nobody knows yet".

Iraqi Minister Jabar Ali al-Luaibi, upon arrival in Vienna, declined to say whether Iraq was ready to cut output: "We hope we (will) have agreement. We will cooperate with members to reach agreement acceptable to all."

Saudi Arabia's Falih was not expected to land before Tuesday evening, leaving little time for traditional pre-discussions with peers.

Iranian semi-official agency MEHR published an editorial on Sunday accusing of declaring a new "war on prices" and saying the Saudi position had changed because of infighting in the royal family.

The tone contrasted with Iranian agencies' more upbeat coverage of OPEC's informal in September in Algeria, when the initial deal was reached.

As prospects for a deal on Wednesday faded, some veteran players urged the group to do its utmost to achieve the first output-limiting deal since 2008 in order to stay relevant.

"needs to wake up instead of playing a game of who will cry first," said former Qatari energy minister and president Abdullah al-Attiyah.

(Additional reporting by Ahmad Ghaddar, Vladimir Soldatkin and Andy Critchlow; Writing by Dmitry Zhdannikov; Editing by Dale Hudson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22