Saudi Arabia, Venezuela, Russia and other oil producing majors held consultations last week but it is unlikely they will reduce output.
Brent crude oil prices fell on April 17, ending a run of rallies earlier last week, after the Organization of the Petroleum Exporting Countries (OPEC) said its output surged in March, adding to a global glut.
OPEC said that its March production jumped 810,000 barrels per day to 30.79 million barrels per day, which is equivalent to a third of global supply.
However, it seems that Saudi Arabia has not had enough of low oil prices as it tries to force high-cost US shale oil out of the market.
OPEC – which includes Saudi Arabia, Iran, Libya, Nigeria and Venezuela – refused last year to reduce production, despite tumbling global oil prices amid a glut in supply. OPEC will meet again on June 5. Meanwhile, individual members are producing as much as they can.
Months of low oil pricesare alsoputting pressure on Russia’s budget and currency, but Russian officials have turned down any suggestion of coordinated production cuts. Non-OPEC member Russia, one of the world’s top oil producers, expects its economy to shrink 3% this year, following an almost 50% drop in oil prices since in last June.
On April 15, Russia’s Deputy Prime Minister Arkady Dvorkovich said Moscow has been holding “unprecedentedly active” consultations with OPEC and Latin American producers. He added that he had spoken to OPEC’s secretary general several days ago.
Moreover, Saudi Arabian Oil Minister Ali al-Naimi reportedly discussed oil markets with Russia’s ambassador to Riyadh, Oleg Ozerov.
And Venezuela’s Oil Minister Asdrubal Chavez met in Caracas with the local ambassadors of eight OPEC members plus Indonesia on April 15, the ministry said.
Venezuela has been keen on OPEC action to boost oil prices amid its deep recession, shortages of basic goods and sky-high inflation. Yet Caracas has publicly refrained from calls to cut output, blaming the US instead for a prolonged slump.
The price of benchmark Brent crude oil has fallen from a high of $114 a barrel in June last year to trade around $62.30.
OPEC said it expected non-OPEC oil supply this year to grow by just 680,000 barrels per day – down from its previous forecast of 850,000 barrels per day. “US tight oil and Canadian oil sands output are expected to see lower growth following the recent strong declines in rig counts,” the report said.
US production certainly appears to be slowing.On April 15, data showed US inventories had built up more slowly than expected.
Data within the report showed a marked increase in crude oil production in Saudi Arabia, Iraq and Libya in March from the previous month. In Saudi, for example, the amount of barrels produced a day rose from 9.6 million barrels per day in February to 10.01 million barrels per day in March.
OPEC left its global oil demand growth forecast unchanged at 1.17 million barrels per day in 2015, with close to two-thirds of this growth coming from China, elsewhere in Asia and the Middle East.
http://www.neurope.eu/article/oil-prices-keep-falling-opec-keeps-pumping/