Opec must agree to production cuts or oil prices will fall further | The National

Opec must agree to production cuts or oil prices will fall further | The National:

"Opec meets on Friday in Vienna to discuss a glutted oil market, but there seems little prospect for reaching an agreement to stabilise oil prices.

Commercial inventories in the Organisation for Economic Co-operation and Development have now breached the record 3 billion barrel mark, supply is about 1 million barrels per day above worldwide demand at a time when inventories are normally drawn, and further Iranian volumes will add fuel to the fire next year when trade sanctions are lifted. Libya could also add 440,000 bpd if two fields come back on stream this month.

Opec producers are competitively discounting to increase market share and the Opec Reference Price (ORP) is actually now only $38-$39 per barrel. Usually the ORP lies between Brent and WTI, but aggressive pricing by Opec countries has reversed the ORP-WTI differential and driven the Opec basket of crudes well below WTI, which closed last week at $41.74 per barrel."



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