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Omani authorities say the country will cooperate in OPEC’s planned output cut, but is holding out on a specific cut commitment until the cartel’s 10 December meeting in Vienna, news agencies report.
OPEC has agreed to cut a total of 1.2 million barrels per day of crude oil production, and now non-OPEC members are being brought into the fold, with the terms of individual member participation to be discussed in Vienna next week, with cuts to be implemented at the beginning of the New Year.
“We will discuss the terms and conditions of a production freeze or cut with other countries. Oman will co-operate to achieve the planned target. Our percentage decrease in production will depend on the meeting and how much we are asked to cut,” Times of Oman quoted Oman’s oil and gas minister, Dr Mohammed Al Rumhy, as saying.
On Sunday, Oman, the largest non-OPEC producer in the Middle East, confirmed that it would attend the 10 December meeting. OPEC is holding out for non-cartel countries to slash 600,000 bpd in crude output, of which Russia has agreed to cut 300,000 bpd on its own.
How much Oman is likely to cut is pure speculation at this point. While the oil and gas minister noted that other non-OPEC producers were throwing about suggestions of a 3-4-percent reduction in output, Oman may be considering bigger cuts. In the past, Oman has indicated that it might be willing to cut between 5 percent and 10 percent of its production in order to help rebalance the market, Reuters reported.
Oman is producing about 1 million bpd, and the Minister Rumhy is eying $50-$60/barrel oil prices next year, assuming the OPEC cuts go forward.
OPEC hit record output in November of 34.19 million bpd, up from 33.82 million bpd the previous month, according to a Reuters survey. Likewise, Russia averaged 11.21 million bpd in November, a 30-year record.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for US-based Divergente LLC consulting firm, and a member of the Creative Professionals Networking Group.