Vienna: Saudi Arabia is seen rejecting calls from fellow Opec members to cut output when the group meets this week as the group’s leader argues it cannot deal alone with one of the most severe oil gluts in history.
Opec is widely expected to stick to its policies – enforced by Saudi Arabia’s Oil Minister Ali Al Naimi a year ago – of defending market share by pumping record volumes to drive rival, higher-cost producers out of the market.
“I hope this time it will be different, but I doubt it will be,” said an Opec delegate from a country usually seeking production cuts.
Three other delegates said they still saw no indication an agreement on cuts was likely to be reached tomorrow.
While the Saudis can claim a partial victory over the US shale oil boom, production from top non-Opec rival Russia has kept surprising on the upside and its own members Iraq and Iran are set to add new barrels. World oil stockpiles are at a record, according to the International Energy Agency.
Venezuelan President Nicolas Maduro yesterday said his country, one of Opec’s traditional price hawks, would push for a five per cent output cut at the meeting.
Opec is producing some 1.7 million barrels per day above ceiling. “The hour has come to put the oil market in order,” Maduro said.
Iran has also asked Opec to respect the ceiling of 30m bpd, but added it would not seek permission to raise output once Western sanctions on the country are lifted next year.
Other Opec price hawks such as Algeria have also called for cuts but as in previous years have not volunteered to reduce output themselves, meaning the burden would have to be carried by Saudi Arabia alone.
Arriving in Vienna on Tuesday, Al Naimi said he would listen to other members, many of whom are complaining about oil prices that have fallen to near six year lows of below $44 a barrel from as high as $115 some 18 months ago.
Opec’s own basket of crude grades has been trading at below $40 since mid-November, the weakest since early 2009.
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