Publicado: Jue, Diciembre 05, 2019
Financiera | Por Marilu Caballero

Goldman expects an 'uneventful' three-month OPEC output cut extension

Goldman expects an 'uneventful' three-month OPEC output cut extension

Brent futures rose 17 cents, or 0.3 per cent, to $61.09 a barrel by 0516 GMT, after having gained 0.7 per cent on Monday.

West Texas Intermediate for January delivery climbed 27 cents, or 0.5%, to $56.37 a barrel on the New York Mercantile Exchange as of 7:42 London.

Oil prices rose on Wednesday ahead of a meeting of OPEC and its allies to discuss whether to extend production curbs to support the market, while industry data showing that USA crude stockpiles fell more than expected helped to lift prices.

Many experts concur that the group, dubbed as OPEC+, will make deeper cuts to the current oil production level to boost crude oil prices.

Helping to support crude oil prices is a report from Bloomberg saying the US and China were moving closer to a trade deal.

Vagit Alekperov, CEO of Russia's second-biggest oil producer, Lukoil, said it would not be expedient to deepen production cuts in the winter, especially for Russian Federation.

Also, the Saudi government is on the verge of putting out a strategy into the market to woo investors before the initial public offering of its oil company, Saudi Aramco.

But analysts say that some nations - including Iraq - have been ignoring the agreement and producing more than their allotted amount.

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"If they just keep the existing situation, then you get this massive oversupply", said Jacques Rousseau, managing director at Clearview Energy Partners. However, some OPEC members may find it hard to make significant cuts on their own terms.

"Iraq has exceeded its production target every month this year", Rousseau said.

"Ongoing concerns over the global economy and the US-China trade war continue to weigh on prices but US crude inventories are expected to have declined last week which may lend some support", Phil Flynn, analyst at Price Futures Group in Chicago, said in a note.

In the meantime, Russia, which is not part of OPEC but has continued to expand its lead in production limits in recent years, has announced that it wishes to recalculate oil production in line with OPEC countries.

"OPEC is quite likely to do what it has often done in the past: put off taking a decision which involves changing the current system until things become clearer", said Neil Atkinson, head of the IEA's oil markets division.

Now that Exxon, Chevron and other supermajors have planted their flags in US shale plays, they are much better financially equipped to boost production if an OPEC production cut does lift prices.

"If anything goes wrong with Saudi production over the next few months and the likelihood of something happening is pretty high ..." "And I think the Saudis know that".

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