As oil dives, the real OPEC meeting will take place at next week's G20 – News – Houma today

For the oil market, it seems that the real meeting of OPEC will take place a week before the scheduled date.

The cartel is scheduled to meet on December 6 in Vienna, but a few days earlier, key decision makers are expected to meet on the sidelines of the G20 summit in Buenos Aires at a meeting that may well decide on the direction of the talks. oil price in 2019.

Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin, who head the world's two largest oil exporters and have been working together to manage the oil market for the past two years, both plan to visit Argentina's capital city in the near future. end of next week. . President Donald Trump, who made his opposition to OPEC a recurring theme in his Twitter diplomacy, is equally important.

"I think President Trump will discuss the optimal price range with Crown Prince Mohamed bin Salman and President Putin at the G20," said Bob McNally, chairman of the Washington-based consultant, Rapidan Energy Advisors LLC and former head of the company. 39, energy at the White House.

The oil market is rife with rumors that MBS, as Prince Mohammed calls it, might not be able to defy Trump 's desire to drive down the price of oil after the White House' s. supported after the assassination of Washington Post columnist Jamal Khashoggi.

"The market assumes that the Saudis will not be able to reduce their spending," said Amrita Sen, chief oil analyst at Energy Aspects Ltd. in London.

Khalid Al-Falih and Alexander Novak, the Saudi and Russian energy ministers, are also due to travel to Buenos Aires with their constituents, according to people familiar with their plans, asking not to be named because their agendas do not exist. Have not yet been unveiled. . Their presence reinforces the impression that Saudi Arabia and Russia will try to reach an agreement before the OPEC meeting a few days later.

This was not the first time that the two energy superpowers used a G20 to decide on oil policy.

At a summit held in Hangzhou, China, in early September 2016, Putin met with MBS to discuss the revival of oil prices. Hours after their private meeting, the Saudi and Russian oil ministers appeared at a press conference. The message was clear: Riyadh and Moscow were working together and a few days later, they announced that OPEC and a number of non-OPEC countries would reduce their production.

The rally in Buenos Aires comes after a week of almost panic on the oil market. Brent crude, the global benchmark, fell Friday to $ 58.41 a barrel, its lowest level in a year, down more than 22% this month due to growing concerns that the world is oversupplied. The American benchmark, West Texas Intermediate, sold close to $ 50 per barrel.

Trump had already celebrated the dive on Wednesday tweeting: "The price of oil is going down. Still, he wants more: "Thanks to Saudi Arabia, but let's go lower!"

But petro-diplomacy is complicated by the consequences of Khashoggi's murder. Trump confirmed Thursday that central intelligence had told him that MBS "could have done it," with regard to the murderer. But he insisted that the CIA "did not conclude" that the prince had given the order.

"You can conclude that it may or may not be the case," Trump said of the CIA report. "Whether he did it or not, he denies it vehemently."

Trump swore that the Khashoggi massacre would not end the White House's relationship with the prince.

"We want low oil prices and Saudi Arabia has really done a good job," he said. For the US president, cheap energy equals a tax cut for the middle class, which is essential for maintaining a sluggish economic expansion.

For MBS, Trump support is essential to avoid more aggressive US action. Congress leaders were more skeptical about his denials. Senator Lindsey Graham, a senior Republican and long-time supporter of Saudi Arabia, insists that "severe sanctions be imposed, including appropriate members of the royal family".

Until now, the 33-year-old prince seems to do his best to keep oil prices low. Saudi crude production reached an all-time high in November, rising from 10.65 million barrels a day to 10.9 million barrels a day, compared with 10.65 million barrels a day in October, according to US officials. industry that monitor Saudi production.

Yet not everyone in the oil market is convinced that MBS will keep taps open to please Trump. Although the US president wants low oil prices, the Saudi prince needs higher oil prices to finance social and military spending, as well as lavish lifestyles of hundreds of princes.

"We remain confident that the Kingdom will adopt a" Saudi-first "policy and prioritize its economic and social well-being before pleasing the US President," said Helima Croft, chief commodities strategist at RBC Capital Market LLC and former CIA analyst.

– Dina Khrennikova from Bloomberg contributed to this report.