24 October 2015, News Wires – Both members and non-members of the Organisation of Petroleum Exporting Countries (OPEC) could not hold talks on possible cuts in crude oil production at a meeting held yesterday to address the decline in crude oil prices.
The joint meeting between OPEC and non-OPEC members is coming as oil prices yesterday hit three-week lows on worries over rising US crude stockpiles. OPEC had invited eight non-member countries, including Russia to the talks, ahead of the cartel’s policy-setting meeting at its Vienna headquarters on December 4, 2015,
Reuters reported that only five non-OPEC nations attended yesterday’s discussions, which did not increase the prospect of cooperation on oil supply curbs or show much support for a price band proposed by OPEC member, Venezuela.
Non-OPEC producers have refused to work with OPEC in cutting supply to reduce a surplus that has prompted oil prices to sink below $50 a barrel from $115 in June 2014.
In turn, OPEC has refused to limit supply alone and many of its members have even raised output.
It was believed that participants at yesterday’s meeting agreed to share information and to continue to assess the market.
“There will be an exchange of views, discussion of the market and the OPEC secretariat’s presentation, but I don’t think there will be an agreement to coordinate,” Reuters quoted an OPEC delegate as saying before the meeting. Of the non-OPEC countries invited, Mexico, Russia, Colombia, Kazakhstan and Brazil sent representatives.
A similar meeting held in May failed to achieve cooperation between the two sides.
Most OPEC countries sent their national representatives – oil experts, who rank below ministers – to the event, although Venezuelan Oil Minister, Eulogio del Pino and his Ecuadorean counterpart, Pedro Merizalde-Pavón are attending.
Cash-strapped member Venezuela is pushing for OPEC and non-OPEC cuts and has proposed reviving OPEC’s price band mechanism, attempting to set a price floor of $70 a barrel.
Venezuela’s del Pino said the market equilibrium price for crude was around $88 per barrel.
“At $40 a barrel, we are below the equilibrium price,” he told reporters during a break from the talks, reiterating comments made by Venezuelan President Nicolas Maduro on Tuesday.
The minister also said Maduro had written to the heads of state of countries participating in the meeting to propose an OPEC and non-OPEC summit next month on the state of the market.
“We are concerned about the depletion of the reservoirs, the decline of the production and about the investment that is required,” del Pino said.
Gulf OPEC members, including top exporter Saudi Arabia, have shown no interest in returning to a strategy of supporting prices, seeking instead to fight for market share.
Crude oil prices slumped to three-week lows yesterday as the US crude oil inventories rose 8 million barrels last week, according to the government-run Energy Information Administration (EIA).
The build was more than double the 3.9 million barrels forecast by analysts in a Reuters’ poll and above the 7.1 million-barrel build reported by industry group American Petroleum Institute.
US crude, West Texas Intermediate (WTI) was down 46 cents at $45.83 a barrel, after tumbling as much as $1.43 earlier to a three-week low of $44.86. Global oil benchmark, Brent was down 30 cents at $48.41, after hitting a three-week low at $47.50.