Tuesday 28 February 2017

Opec fails to agree a deal on oil production

Grant Smith and Wael Mahdi

Saudi Arabia's Energy Minister Khalid al-Falih talks to journalists before a meeting of Opec oil ministers in Vienna
Saudi Arabia's Energy Minister Khalid al-Falih talks to journalists before a meeting of Opec oil ministers in Vienna

OPEC will stick to its policy of unfettered production after members failed to agree on a new output ceiling, but ministers were united in their optimism that global oil markets are improving.

While crude prices dipped after yesterday's meeting in Vienna, there was little of the rancour that punctuated last December's summit.

The group was also able to appoint a new secretary-general - Nigeria's Mohammed Barkindo - something it couldn't agree on last year.

All members see the same market fundamentals and have been "highly cooperative", new Saudi Oil Minister Khalid Al-Falih told reporters.

Iran's Bijan Namdar Zanganeh reported "very good unity", while his Nigerian counterpart said relations had improved "substantially" and even Venezuela - a strong supporter of freezing output - said the meeting was "very positive".

Saudi Arabia had floated the idea of restoring a group production ceiling though members decided it wasn't necessary at this stage.

Opec needs more time to come up with an output cap, outgoing secretary-general Abdalla El-Badri said after the meeting, adding that it's hard to find a target when Iranian production is rising and significant Libyan volumes are halted.

"There was far less animosity between those players who did not necessarily see eye-to-eye in the last few meetings," said Amrita Sen, chief oil analyst at consultant Energy Aspects.

"The fact that the group managed to elect a new secretary- general after so many failed attempts also points towards a small measure of co-operation."

Mr Barkindo, who was acting head of Opec in 2006 and previously ran Nigerian National Petroleum, will assume the top job on August 1.

Yesterday's summit follows a recovery in oil to almost $50 a barrel from below $30 in January after depressed prices took their toll on supplies. That suggests Opec's Saudi-led decision in 2014 to maintain output amid a global glut is finally paying off, with higher-cost producers cutting back. (Bloomberg)

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business