Al-Falih: No talks of deeper output cuts at OPEC, non-OPEC meeting

OPEC and non-member oil exporters will not discuss deeper output cuts during their meeting today in St. Petersburg, Russia, Saudi Arabia’s oil Minister Khalid Al-Falih said ahead of the meeting.

The oil ministers will consider putting production caps on Nigeria and Libya, which are currently exempt for output limit deal, Reuters reported.

Falih said OPEC and its non-OPEC partners, such as Russia were ready to take additional measures to help the market rebalance, Reuters added in a separate report.

Crude oil prices edged higher as the meeting of oil ministers from OPEC nations and other major producers began.

Brent crude was last trading higher by 0.3 percent at $48.18 per barrel (bbl) and WTI rose 0.2 percent to $45.84/bbl.

The output cuts, implemented for six months in January and extended for another nine last month, have had a limited impact on boosting oil prices, analysts said.

“The market reaction to the OPEC agreement shows that oil production cut has little effect on prices as long as producers who did not participate in the OPEC deal raise their production,” Shoaib Abedi, director at ICM Capital, told Argaam.

Crude prices, which had jumped to a high of $57/bbl soon after OPEC capped output in January, have mostly remained below $50/bbl since the deal was extended without additional cuts in June.

Given the price trends and the market reaction, OPEC might look at market share more than market price after the deal expires in March 2018, Abedi said.

Meanwhile, Germany-based Commerzbank said it is “skeptical” of OPEC’s ability to restore balance in global oil markets.

“Yet while they are doing a fairly poor job of restoring the balance on the oil market, what they are doing above all is raising expectations of rising prices,” the lender said in a note on Monday.