Cracks Appear in the Saudi Position

Can OPEC Pour Oil on Troubled Waters?

Shortly, I am leaving for Paris. The next ECRG Intel will be from "The City of Lights" and follow my meetings with energy and finance sector colleagues, including contacts at the International Energy Agency.

We are going to be assessing the OPEC meetings underway at the World Energy Congress in Istanbul. On the agenda as well will be some pointed conversations on whether the production cap announced at the International Energy Forum ministerial meetings in Algiers will actually occur, along with what impact this is likely to have on the international flow of oil finance.

Recall that the specifics on limiting global crude oil extraction are supposed to be laid out during the next regular OPC meetings, which will take place at the cartel's Secretariat in Vienna on November 30.

However, there is much happening before that, and some of it is unfolding as I write this-in ways that may hamper any meaningful accord. The substance of the cap should become known well in advance of Vienna. Yet current signals are pointing to some very difficult negotiations.

First, Russia (the main non-OPEC producer) is taking a tough stance on a cap. Minenergo sources confirm that the Kremlin was enrages by the Saudi eleventh-hour position at April's Doha meetings. Having come on board for a cap using January production figures, Russian ministry officials felt like they had been thrown under the bus when Riyadh demanded that Iran accept any accord.

Iran was not even present at Doha, had already stated it would not accept a limit until having reached pre-sanction production levels, and regarded the Saudi insistence as a geopolitical salvo. Most producers, including those contributing the bulk of the exports, responded by opening up the taps and flooding the market with additional volume. Another move down in prices resulted.

To continue reading this ECRG Intelligence Briefing click here: http://hvst.co/2e90bJG 

---

To learn more about ECRG Intelligence Briefings and other Energy Capital Research Group daily intelligence briefings, updates, and longer term projections, please contact us by telephone at +1.443.353.4519 (M-F, 9-5 ET) or get in touch using this form: http://hvst.co/2dO6WjO  . Please mention you heard about ECRG from Harvest.

To subscribe to ECRG Intelligence complete the form here: http://hvst.co/2dO8vyl