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Six OPEC Members, Plus Russia, Now Open to Emergency Meeting

Oil prices have whipsawed back and forth over the past two weeks, largely due to the rise and fall of expectations that OPEC might call an emergency meeting.

Comments from several Russian oil executives and government officials sent oil prices surging at the end of January. Then prices retraced their gains when officials from OPEC dismissed the stories as just rumors. Nothing had changed, OPEC officials argued, even though some people in Russia were hinting at a meeting.

But the rumors persist. The latest fuel to the rumor fire is the fact that now six OPEC member states have said that they would be willing to attend an emergency meeting if one was called, the highest total yet. Venezuela has officially requested an emergency meeting, and the oil minister from the South American OPEC member said that six OPEC members plus two non-members are willing to discuss measures to stabilize oil prices.

Related: Oil Majors Converging Here Could Mean A New Hotspot

The list includes Iraq, Algeria, Nigeria, Ecuador, Iran, and of course Venezuela. Russia and Oman, two non-OPEC members, would also be willing to attend. “The idea is to not just hold a meeting, but for all the countries to attend with the intention of reaching agreements,” Venezuela’s oil minister Eulogio Del Pino said in the statement. “Current prices are below equilibrium, and that encourages the speculators and market instability.”

The last statement is especially true – oil markets are at their most volatile point in years. The price movements over the past few weeks have been large and extreme. But speculators are starting to take much more bullish positions on crude oil, closing out net-short positions and going long. That suggests that a more solid price rally could be just around the corner – or, at least, speculators think that might be the case.

Related: Why U.S. Shale Is Not Capitulating Yet

A rally will depend on the fundamentals, however, which is why a potential emergency OPEC meeting looms so large over the oil markets. Much now depends on Saudi Arabia’s position, the most powerful member of OPEC. Saudi Arabia has suggested in the past that it would be open to coordinated production cuts if Russia came along. There are still a lot of hurdles that would need to be cleared for cooperation between all the parties involved, but Venezuela is doing its best to get everyone on board.

By Charles Kennedy of Oilprice.com

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  • Russian Jew on February 08 2016 said:
    Russia will not give in an inch of its oil market share to anybody, period.
  • hugh on February 07 2016 said:
    super big oil money dependent nations are getting scare by the growing number of small producers, growing interest of electric and eco vehicles and movement towards alternative energy. so dumping oil to lower price for few years hoping this will be enough to do the killing. no special Saudi policy or meeting is real. this childish mind game play many time over to get people on their boat of cheap oil and destory the enthusiasm to saving energy before the slaughter begin by limiting supply and then telling people how little oil is left in the ground as they have told us and did to us before

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