Battle Inside OPEC Eases As Saudi Oil Strategy Finally Pays Off
OPEC’s previous ministerial meeting in December ended without any agreement on a group output ceiling, abandoning the target of 30 million barrels a day that the organization had held -- and mostly ignored -- since late 2011.
Key Figure
While prices collapsed after that gathering amid OPEC’s inaction, just as they had when the approach was first revealed in November 2014, the response will probably be subdued this time as the market has accepted the laissez-faire policy is here to stay, said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London.
The Vienna meeting will be the first opportunity to assess the stance of new Saudi Energy Minister Khalid Al-Falih, appointed this month when Ali al-Naimi stepped down after two decades, according to Tchilinguirian. Al-Falih is close to Prince Mohammed, who’s plan to partly privatize the state oil company has sparked speculation it may further expand production capacity and market share, severing its ties to OPEC.
That change in Saudi leadership means the meeting will still be “pivotal for the cartel and its future,” said Tchilinguirian.
--With assistance from Mark Shenk. To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net Dylan Griffiths
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