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OPEC Prepared To Call ‘Extraordinary Meeting’ As Oil Falls

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Just a couple of weeks after OPEC and its partners agreed to implement another round of production cuts, the cartel is ready to extend these cuts as international prices continue to fall.

Reuters reports, citing the oil minister of the UAE, that OPEC is prepared to call an extraordinary meeting as it enters “whatever it takes” mode yet again.

Earlier this month OPEC, Russia and nine more producers agreed to reduce their combined oil output by 1.2 million barrels daily, with OPEC’s share at 800,000 bpd. However, the news failed to impress a market worried about global economic growth and consequently crude oil demand.

Speaking at a news conference in Kuwait, UAE’s Suhail al-Mazrouei said it would not be a problem for the cartel to extend the period of the cuts, initially set at four months, beginning in January.

“What if the 1.2 million barrels of cuts are not enough? I am telling you that if it is not, we will meet and see what is enough and we will do it,” Mazrouei said, adding “The plan (to cut oil production) is well studied but if it does not work, we always have the power in OPEC to call for an extraordinary meeting. If we are required to extend for (another) six months, we will do it... I can assure you an extension will not be a problem.”

While the mood in OPEC appears to be on the worried side, Argus Media expects oil prices to stabilize early in 2019 as the cuts take effect. CNBC reports, citing the energy data provider, that it sees Brent crude at an average of US$65 a barrel during the first quarter of 2019, rising to US$68 a barrel in the second quarter and further to the low US$70s in the third quarter of 2019.

By Irina Slav for Oilprice.com

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  • elmore on December 27 2018 said:
    Arabs need to understand the changing dynamics of oil market. Gone the days when they alone had the control over oil to indirectly rule the world. Their lack of self reliance and terrible dependence on outside world even for the very basic of their requirements has made their survival costs high.

    Also their human resource does not seem to be promising enough to avoid dependence on foreign work force and drain of reserves is going to continue.

    The price of oil is going to remain $ 50 max for quite some time now and it may not be a very good news to the Arab world.
  • John Brown on December 25 2018 said:
    OPEC GREED caused this crash in oil prices & slammed world growth rates. The high sustainable side for WTI was $60 but the filthy greed throughout the industry won & they pushed it to over $75 w predictable results. A hammer to global growth & slowdown & a gold rush in the USA w shale oil & gas. It also helped renewables gain more market share. Greedy idiots. They’d be smart to let lower prices last a few months & pray it kickstarts global growth & then gradually push prices to $55 to $60 for WTI. Of course if they haven’t thrown the world into recession & prices increase GREED will take over again. They haven’t learned that technology has increased the supply of recoverable oil & lowered the costs & time to market while making renewables far more competitive? They are still thinking like it’s 10 or 15 years ago. Greedy idiots.
  • Frank on December 24 2018 said:
    MBS should be freaking out right about now. So much for that budget an announced last week.
  • 2 yallah on December 24 2018 said:
    Please Saudi Kings bring the price of Oil up ASAP? Why would anyone other than trump want oil price to be lower? OIL NEEDS TO BE ABOVE 80 otherwise we will go broke.

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