Headline hockey continues in the energy complex as earlier confirmation of a pending OPEC meeting possible in February has seen more color added, via Reuters, that Saudi Arabia made a proposal that OPEC members cut production by a maximum of 5%. There remains confusion however as Bloomberg reports simply that Russian energy minister has said they "may discuss it," as opposed to being a specific proposal.
Reuters seems confident that The House of Saud has backed down and prosposed the cut...
- RUSSIAN ENERGY MINISTER STATES THAT SAUDI ARABIA MADE A PROPOSAL TO REDUCE OIL OUTPUT BY EACH COUNTRY BY A MAXIMUM OF 5%
But Bloomberg is less confident that this is an actual proposal...
- RUSSIA'S NOVAK SAYS OPEC MEETING MAY DISCUSS 5% OUTPUT CUT: RIA
- NOVAK: 5% CUT TALKS MAY INVOLVE ALL OIL PRODUCING NATIONS: RIA
- NOVAK: OPEC, PRODUCER MEETING WOULD BE MINISTER LEVEL: RIA
And further, Interfax reports that this is nothing new...
- NOVAK: SAUDI ARABIA 5% OIL CUT PROPOSAL WAS MADE EARLIER: IFX
- DJ RUSSIA ENERGY MINISTER: TOO EARLY TO TALK OF ANY AGREEMENT ON POTENTIAL CUTS- DOW JONES
- RUSSIA ENERGY MIN: FEB OIL MTG MAY DISCUSS 5% CUT, DJ SAYS
Iran wants to recover its position as OPEC's second-largest producer behind Saudi Arabia, which it lost in 2012 to Iraq when sanctions over its nuclear work forced Tehran to cut exports. Now, the recovery of market share is central, sources say."Because of the international sanctions, we lost 1.1 million barrels per day of our exports. So we have to go back to our share of the market," a source familiar with Iranian thinking said on Thursday.With sanctions lifted this month, Iran says it is increasing its oil output by 500,000 barrels per day (bpd) and boosting exports, a plan that other OPEC sources say makes any global cut agreement harder."Any deal is difficult to reach," said a non-Iranian OPEC source, who added Iran would need to keep output flat or raise it by, say, 100,000 bpd "since higher prices would mean more revenue without the need to raise production. But I doubt it, really."
Oil is reacting...
So no US ally Iran is to blame if there are no production cuts?