(Bloomberg) - There are currently no proposals on the table for OPEC to revive limits on crude output at its June meeting after the failure of talks to freeze production last month, according to six delegates from the group.
A meeting of representatives from the Organization of Petroleum Exporting Countries in Vienna Wednesday discussed how the fundamentals of oil supply and demand are improving, according to two delegates, who asked not to be named because the talks were private. The proposal to freeze output has been overtaken by changes in the market and may no longer be necessary, said two delegates from nations that had supported the idea last month.
Oil has rebounded after slumping to the lowest since 2003 earlier this year on signs the global glut is easing as U.S. output declines. Prices gained even though OPEC itself has been without a production target since December, and talks with other producers to freeze output fell apart last month after Saudi Arabia refused to join without Iran. While the recovery has relieved some pressure on producers, signs of discord persisted within the oil-exporters group.
Brent crude, the international benchmark, has continued to advance since the failure of the Doha talks, rising to $48.50 a barrel last week, the highest level since November. Global supply and demand will move close to balance in the second half of the year as lower prices take their toll on production outside OPEC, the International Energy Agency said last month. U.S. crude output fell to 8.83 million barrels a day last week, the eighth consecutive weekly decline, according to Energy Information Administration data.
There were indications the freeze proposal could be revived at OPEC’s bi-annual meeting in June. While Venezuela -- one of the architects of the freeze plan -- requested that non-members that participated in the Doha talks should be invited to the June meeting, OPEC nations have yet to respond to the request, said two delegates.
In a sign of continuing discord within OPEC, members of the group were unable to finish their long-term strategy report at the meeting in Vienna Tuesday because of differences over the wording of the document, according to two delegates. The plan was already delayed in November because of disagreements over clauses suggested by some members about curtailing output, setting production quotas and finding ways to maximize OPEC profit.
To contact the reporter on this story: Grant Smith in London at firstname.lastname@example.org To contact the editors responsible for this story: James Herron at email@example.com Alex Devine
Copyright 2016 Bloomberg News.
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