OPEC defies Trump .. Does Riyadh give up its old ally in favor of the new boyfriend? World News

OPEC defies Trump .. Does Riyadh give up its old ally in favor of the new boyfriend? World News

World – reports

The discussions will continue on Friday with independent producers, according to an OPEC delegate.

Riyadh and Tehran agree against the US president in OPEC, where Trump's demand for OPEC not to cut production, the rejection of Saudi and Iranian cynicism.

In an emphatic assertion of the rejection of Trump's dictations to OPEC, Saudi Energy Minister Khalid al-Falih said Washington was "not in a position to dictate its wishes to OPEC." He said in an impressive statement before an OPEC meeting in Vienna on Thursday: "I do not need permission One to cut production. "

Al-Falih considered that the reduction of one million barrels per day is desirable, without specifying whether this reduction will depart from the targets set at the end of 2016 or the production volume of the group in October and November.

He pointed out that this reduction, which may be decided during the meeting, "must be distributed equally among Member States" according to the percentage of production.

After Iranian Oil Minister Bijen Zankaneh said he was opposed to reducing his country's production because of the US embargo, he also ridiculed Trump's appeal on Thursday. "It's the first time an American president has told OPEC what to do,"He said.

"They need to know that OPEC is an independent organization," he said, adding that it was not a branch of the US Department of Energy to receive orders from Washington.

He revealed the existence of many proposals to reduce oil production, and that "OPEC members who want to reduce production should decide this, indicating that the appropriate price for a barrel of oil ranges from 60 to 70 dollars"He said.

On Wednesday, Trump called on OPEC members not to cut production, saying that global oil prices should remain low..

Trump has often complained about Opec this year because rising crude oil prices are driving up fuel prices in America.

The US State Department confirmed news circulated about the meeting between the Saudi Energy Minister and the US special envoy for Iran Brian Hawk in Vienna on Wednesday, despite the denial of the Saudi Ministry of Energy. The meeting raised fears of the extent of the American pressure exerted on Riyadh to stop production cuts, in order to prevent high oil prices.

Reuters sources pointed out that the ministerial control committee between OPEC and its allies, including Russia agreed on the need to reduce oil production next year, adding that discussions are underway on the size of the reductions and the basis of them, despite the pressures of Trump, which aims to reduce prices Oil.

Trump's pressure comes at a time when Oman's oil minister said everyone agreed on the need for production cuts and the size of those cuts was discussed.

He added that OPEC and independent producers may agree to cut production by about one million barrels per day at the meeting expected, indicating that this figure is just over 1% of global production, according to the agency Bloomberg.

The Kuwaiti Oil Ministry predicted on its Twitter account that a long-term cooperation agreement between OPEC and oil producers from outside would be signed.

OPEC and its partners could return to 2016 production quotas by cutting oil production by more than 1 million bpd, the TAS news agency said.

The former Algerian oil minister predicted the stability of the price of Brent crude near $ 70 a barrel after the Vienna meeting expected, according to an interview with the Anatolia.

Iraqi Oil Minister Thamir al-Ghadhban confirmed on Thursday that he was optimistic about an agreement on reducing production, pointing out that there was no specific figure to cut output.

"I am optimistic that the agreement will be achieved and that it will provide market stability," the minister said in a statement ahead of the OPEC summit. He pointed out that "there is no specific figure to reduce production and that talking about a reduction of 1.3 million barrels."

Michael Cohen, an energy analyst, said in an analytical report on the channel's website CNBC That Iraq could be the next country to withdraw from OPEC after Qatar, adding that "Iraq has not been successful in achieving the desired rate of export of oil repeatedly, so if the restrictions on the reduction of production is very strict, Iraq may feel it is in his interest not to remain a member In the Organization, "as he put it.

Most analysts expect an announcement of a production cut that remains unknown, with the aim of improving the price of oil, which is about $ 60 per barrel European Brent.

Oil prices lost $ 26 between early October and early December, dropping from $ 86 a barrel, the highest level since the fall of 2014, to $ 60 this month..

"Russia has a key role to play in this (production reduction)," analysts at the Komertsbank group said earlier on Thursday.

Russian oil minister Alexander Novak, who will attend a meeting in Vienna on Thursday in St. Petersburg, said that "the weather" during the Russian winter "makes it harder for Russia to cut more than other countries, suggesting that the Russian effort in this direction may not come Only later.

Analyst Stephen Brinock of the London brokerage group BVM said the agreement on a new cut was almost "pre-determined." He added that the opposite scenario will lead to "a wave of sales in large quantities and will ensure a return to the global surplus of oil The only unknown point at this stage is the size of production reduction".

Obstacles and potential exits

The crux of the matter is how to reduce production, create the mechanism for this cut, and formulate a final statement for OPEC that does not appeal to the US president.

How will the quota be determined for each country and on what level will the reduction be made? Will Venezuela and Iran be included in the commitment ratios or will be excluded? Because if excluded from the commitment ratios, it facilitates the process of reducing production for the rest of the members, specifically Saudi Arabia and the UAE, which increased production during the past months.

Trump is trying to cut gasoline prices in America, but on the other hand, the continuing decline in oil prices is hurting the US rock oil industry. The net effect of the drop in oil prices on the US economy will be positive or negative..

US oil prices will also affect US $ 50 and less on some aspects of the US oil industry. The complexity is that a final statement that should try to stop price declines from the other side does not offend the US.

All these issues, in addition to the mechanism of reducing production, are expected by all in the wording that will be issued by the final OPEC statement.

Analysts are likely to cut production significantly, despite pressure from the US president. In a report published last week, the Eurasia Group said it expected an agreement between OPEC and Russia to cut production by 1.5 million barrels per day.

Saudi Arabia said last month it would cut its daily output by 500,000 barrels in December and pumped 10.6 million barrels per day in October, before Saudi Arabia said it would cut its production in December by 500,000 barrels. Production will rise from this level in November.

On the other hand, analysts believe that Saudi Arabia may seek a modest reduction, in an attempt to balance the interest of OPEC members and what Trump wants, which thanked Saudi Arabia last November, to keep oil prices low, just one day to indicate that it will not Takes strong action against the kingdom over the killing of Saudi journalist Jamal Khashoggi.

"The meeting of OPEC ministers, which began in Vienna on Thursday, is perhaps the biggest challenge for Saudi Arabia and Prince Mohammed bin Salman, its actual ruler, because he will have to choose," said Abdel Bari Atwan, editor and journalist of the daily Rai. Among an old ally is President Donald Trump, who opposes any cut in production and keeping prices low, or a new friend, Russian President Vladimir Putin, who was the only one he warmly welcomed during the G20 summit, demanding a cut of production by more than one million barrels to restore prices to the high level it has reached October a For (last October), or $ 86 a barrel. Pleasing Putin may mean Trump's indignation, and vice versa. "

International pressure on Saudi Arabia remains strong. US Senator Bob Korker said on Tuesday he believed Crown Prince Mohammed bin Salman was involved in the killing of Saudi journalist Jamal Khashoggi.

However, it may not be enough to cut one million barrels a day or less to stabilize the market, which is oversupplied, said Warren Patterson, a commodities strategist B ING: "This is frustrating, I think is not enough to balance the market during the first half of 2019"He said.

While analysts believe the least likely outcome is OPEC's failure to cut output, FAO Secretary-General Mohamed Barkindo saidCNN Last November, members were talking to ensure consensus before the Vienna meeting.

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