A meeting of OPEC and non-OPEC oil market experts this week is unlikely to increase the prospect of joint co-operation on supply curbs or show much support for Venezuela’s proposed price band, OPEC delegates and analysts said.
The Organization of the Petroleum Exporting Countries has invited eight non-member countries including Russia for talks on the market at its Vienna headquarters on Wednesday.
OPEC’s own meeting to set policy is not until Dec. 4.
Non-OPEC producers have refused to work with OPEC in cutting supply to reduce a surplus that has prompted prices to sink to below $50 a barrel from $115 in June 2014. In turn, OPEC has refused to limit supply alone and many members have raised output.
Venezuela is nonetheless pushing for OPEC and non-OPEC cuts and has proposed reviving OPEC’s price band mechanism, attempting to set a $70 price floor. But two OPEC delegates said the prospect of joint output cuts was low and the price band was unlikely to find much support.
“I really don’t believe that Venezuela will succeed in its attempts,” said one of the delegates.
“OPEC countries are now over-producing so the cutback should start from within before trying with non-OPEC producers.”
According to OPEC’s own figures, OPEC is pumping 31.57 million barrels per day (bpd), much more than its official 30 million bpd target and the lion’s share of an excess supply of almost 2 million bpd.
Most OPEC countries are sending their national representatives — oil experts who rank below ministers — to the event, although Venezuelan Oil Minister Eulogio del Pino and possibly his Ecuadorean counterpart Pedro Merizalde-Pavon are expected to attend.
“It won’t be better than the one before,” said another OPEC delegate, referring to a technical OPEC and non-OPEC meeting in May which failed to achieve cooperation between the two sides.
Expectations among some OPEC watchers are also low, given that Saudi Arabia has shown no interest in returning to a strategy of supporting prices.
“The meeting has a good chance of resulting in an agreement to share information and/or plans to continue to assess the market,” said Jamie Webster, analyst at IHS and an OPEC expert.
“But in terms of what the market is looking for — a clear unequivocal plan to cut — it is very unlikely to deliver.”