(Bloomberg) -- A summit between OPEC and non-OPEC oil producers that Venezuela is proposing should focus on supporting prices rather than limiting volume, the country’s oil minister said Tuesday.
Venezuela seeks a fair price for oil that will support economic growth and energy demand, Oil Minister Eulogio Del Pino said in an interview at Tuesday’s meeting between Venezuela and Saudi Arabia officials in Caracas. The oil price floor Venezuela is suggesting would be analyzed every quarter, he added. The proposals for a meeting are advancing, Foreign Minister Delcy Rodriguez said after talks with the Saudi delegation.
The Organization of Petroleum Exporting Countries has come under pressure from Venezuela and some other members to take action after the group decided last November not to reduce output. Saudi Arabia led OPEC’s decision to compete for market share against U.S. shale producers rather than support prices. Oil in New York and London reached six-year lows last month amid excess global supply.
“They are certainly motivated to try and put something together -- something that limits production, raises prices and helps Venezuelan finances,” Tim Evans, an energy analyst at Citi Futures Perspective in New York, said by phone. “They have been floating these trial balloons for a while.”
Brent crude, the benchmark for more than half the world’s oil, would need to climb to $89 a barrel for Venezuela to balance its budget, Robert Burgess, a London-based analyst for Deutsche Bank AG , said in a May report. Brent rose 26 cents, or 0.6 percent, to $46.63 a barrel on the London-based ICE Futures Europe exchange Tuesday.
A Saudi Arabian delegation headed by Tawfiq Bin Fawzan Al Rabiah, the kingdom’s commerce minister, and Abdullah Bin Abdullah Al Obaid, vice minister of foreign relations, met with Venezuelan counterparts for a second day in Caracas.
"I can see the Saudis giving the Venezuelans permission to pursue this idea, without pushing it themselves," Evans said. "A major hurdle is that non-OPEC countries might not be interested in such a meeting after already cutting their expenditures and making other moves. They probably feel they’ve already made their contribution."
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