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The U.S. will not be attending OPEC’s meeting with other oil exporters, as the cartel has not invited countries that are not exporters, Russia’s TASS news agency quoted Russian energy minister Alexander Novak as saying on Thursday, hinting that that’s the reason why the U.S. has not been invited to attend.
The U.S. does export crude oil, and exports all the more after it lifted a four-decade-oil restriction on exports last year. As of August this year, the U.S. had exported crude oil to 16 different countries.
Nevertheless, OPEC and Russia are not requesting the presence of the U.S. for the talk on how to “fix” the oil market. Of course, we doubt that anyone from the U.S. would have sat down with cartel leaders to discuss how to manipulate the market supply and demand by deliberately taking barrels of oil off the market.
“I know that a large number of non-OPEC countries are going to participate - I know about Mexico, Kazakhstan, Oman,” TASS quoted Novak as saying. The minister added that Russia would announce the final figures for Russian companies’ cuts after the December 10 meeting in Vienna.
Novak may know that ‘a large number’ of non-cartel producers would take part in Saturday’s meeting, but according to OPEC sources quoted by Reuters, only 5 out of 14 non-OPEC producers invited to attend the meeting have so far accepted the invitation: Azerbaijan, Kazakhstan, Oman, Mexico, and Russia.
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Of those five producers, only Russia and Oman have said they were willing to cut. Russia has pledged a gradual cut by 300,000 bpd over the first half of 2017, while Oman has said it would announce cuts after the meeting, but indicating that it may be willing to cut 5-10 percent, but that was before OPEC announced the deal.
Mexico is heading for a natural decline of production of its ageing fields, so a production cut there is a given. Azerbaijan has said it was ready “to accept proposals and make its contribution to the process of raising oil price”. Kazakhstan has not committed to cuts, and just launched its giant Kashagan field, which is expected to produce around 192,000 bpd in 2017.
Commenting on chances of collective OPEC-non-OPEC cuts, Robert McNally, president of The Rapidan Group, said, as quoted by CNBC:
“My sense is the fear factor is not strong enough to get countries to do anything but promise cuts that they never intend to make.”
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.