OPEC set for no deal on output

Saudi Arabia and Iran dashed hopes that OPEC oil producers could clinch an output-limiting deal in Algeria this week as the group and non-member Russia were still trying to bridge differences between the Kingdom and Tehran.
“This is a consultative meeting,” Saudi Energy Minister Khalid Al-Falih told reporters.
Iranian Oil Minister Bijan Zanganeh said: “It is not the time for decision-making.” 
Referring to the next formal OPEC meeting in Vienna on Nov. 30, he added: “We will try to reach agreement for November.”
The Organization of the Petroleum Exporting Countries will hold informal talks at 1400 GMT on Wednesday. Its members are also meeting non-OPEC producers on the sidelines of the International Energy Forum, which groups producers and consumers.
Oil prices have more than halved from 2014 levels due to oversupply, prompting OPEC producers and rival Russia to seek a market rebalancing that would boost revenues from oil exports and help their crippled budgets.
The predominant idea since early 2016 among producers has been to agree to freeze output levels, although market watchers have said such a move would fail to reduce unwanted barrels.
Al-Falih also said he is optimistic about the oil market.
“We are optimistic about the fundamentals. The market is trending in the right direction, slower than what we had hoped for a few months ago but the fundamentals are moving in the right direction,” said Al-Falih.
“From that aspect we are feeling good about the market and I think the rebalancing is here but taking slower than what we had hoped.”
On Tuesday, several OPEC delegates said the positions of Saudi Arabia and Iran remained too far apart. Oil prices were down more than 3 percent.
“There is a move forward, but they (OPEC) haven’t got to the finish,” Russian Energy Minister Alexander Novak said after meeting Falih and Zanganeh.
Three OPEC sources said Iran, whose production has stagnated at 3.6 million barrels per day, insisted on having the right to ramp up to around 4.1-4.2 million bpd, while OPEC Gulf members wanted its output to be frozen below 4 million.
“Don’t expect anything unless Iran suddenly changes its mind and agrees to a freeze. But I don’t think they will,” an OPEC source familiar with discussions said.
Several other sources said Algeria and Qatar were also talking to Iran in a bid to rescue a deal.
Iranian oil sources said Tehran wanted OPEC to allow it to produce 12.7 percent of the group’s output, equal to what it was extracting before 2012.
Between 2012 and 2016, Saudi Arabia and other Gulf OPEC members have raised output to compete for market share with higher-cost producers such as the US.
Bjarne Schieldrop, chief commodities analyst at SEB Markets, said the lack of a deal in Algeria would result in further downside pressure on oil.

Source: Arab News