Experts see a fair chance that there will be a production cut agreement at the OPEC 170th Ordinary Meeting in Vienna, the result of Saudi Arabian lobbying at a September gathering in Algeria of the world's major oil producers.
Oil Price magazine reports that Saudi Arabia's oil minister Khalid al-Falih told the Oil & Money conference in London in October that many countries outside OPEC "are willing to join the negotiations on a crude oil production reduction initiated by the cartel" in September. He added that behind-the-scenes talks are being held with non-OPEC producers who have declared their readiness to not just freeze, but to cut their production to match the organization's attempt at rebalancing the markets.
The major non-OPEC oil producers include Russia, the United States, Canada, Norway, Mexico, China, India, Brazil, Azerbaijan and Kazakhstan.
Iran has been the main opponent of a freeze as it looks to raise its output to levels seen before the imposition of now-ended Western sanctions, according to Reuters. OPEC member Venezuela, on the other hand, can be counted on to support the Saudi push. Almost totally dependent on income from oil, it would find some relief from its dire economic straits if the Saudi proposals result in higher prices on market fears of a tighter supply. The newswire notes that the Saudi push indicates Riyadh is worried oil prices could be heading back towards U.S. $40 per barrel - or lower - due to fears of oversupply.
Date written/update: 2016-10-22