Major oil producers plan cuts after price cuts

The major oil producers gathered Sunday in Abu Dhabi to consider returning to a reduction in their production after the sharp drop in crude prices that revived fears of a 2014 crash.

Oil prices lost one-fifth of their value in just one month, after peaking at four years in early October, due to a combination of factors centered on an increase in supply and fears of weakness. the demand.

Brent fell below $ 70 a barrel on Friday for the first time since April, while New York's West Texas Intermediate (WTI) dropped below $ 60 a barrel, its lowest level in nine months .

The United States has increased its production of shale oil, while Saudi Arabia, Russia and others have increased their supplies of crude despite signs of slowing demand.

This slide also comes at the time of signs of a smaller than expected impact of US sanctions on Iranian oil exports.

"Prices have fallen against a backdrop of steady rise in crude supplies from major producers, such as Saudi Arabia, Russia and the United States, largely offsetting Iran's barrel losses," he said. AFP Fawad Razaqzada, Forex.com analyst.

"Iranian sanctions not being as severe as initially planned, OPEC officials and non-OPEC producers could discuss the weekend of the need to restore respect for the United States. rules at a level equal to 100% or risk a further fall in prices in 2014, "he said.

Energy ministers of major producers, Russia and Saudi Arabia, will join other leaders of OPEC and representatives from outside the country. OPEC for the meeting of the Joint Ministerial Monitoring Committee, which oversees production levels.

The world's second and third largest crude oil producer – after being overtaken by the United States thanks to shale oil – Russia and Saudi Arabia are at the heart of an alliance of producing countries that have managed to consolidate oil prices after the 2014 crash.

With significant production cuts starting in early 2017, they managed to push oil prices from less than $ 30 a barrel to over $ 85 a barrel in October, boosting their incomes.

But producing countries eased production cuts in June after signs of a tense market and higher prices, allowing hundreds of thousands of extra barrels to enter the market.

Saudi Arabia has increased production from about 9.9 million barrels a day in May to about 10.7 million barrels a day in October, according to Energy Minister Khalid al-Sabah. -Falih.

Kuwait, Iraq, Russia and the United Arab Emirates have also increased their production.

Cailin Birch, an analyst at the Economist Intelligence Unit, said that a slowdown in oil demand was beginning to appear in China, the world's largest importer of crude oil.

"The recent decline in oil prices reflects a combination of factors: First, signs of slowing demand for oil are beginning to emerge, China's GDP growth rate is beginning to moderate," he said. Mr Birch at AFP.

The meeting, which will also be attended by the oil ministers of Kuwait, Venezuela and the host country of the United Arab Emirates, should not make a decision, but will most likely send signals.

The JMMC, a technical committee, is expected to make important recommendations on production cuts at a key ministerial meeting in Vienna next month for OPEC producers and other producers.

Commerzbank, the second-largest lender in Germany, said Friday that oil producers should act to prevent a free fall in prices.

"If they do not signal any intention to reverse the latest increase in production, oil prices are threatening to fall further," the bank said in a note.