(Bloomberg) -- OPEC members gathering in Vienna June 2 are expected to go along with a Saudi Arabia-led policy focused on squeezing out rivals amid signs the strategy is working. That means the meeting may be less fraught than the previous summit in December, which ended with public criticism of the Saudi position from Venezuela and Iran.
By allowing prices to fall, high-cost producers are being forced out, easing the supply glut and spurring a rally of 80 percent since January to about $50 a barrel. All but one of 27 analysts surveyed by Bloomberg said the Organization of Petroleum Exporting Countries will stick with the strategy. An alternative proposal -- to freeze output -- was finally rejected in Doha last month.
The group may also choose a secretary-general to replace Abdalla El-Badri, whose term has been extended after members failed to agree on a successor. In recent months, three new hopefuls have emerged to try and break the impasse: Nigeria’s Mohammed Barkindo, Indonesia’s Mahendra Siregar and Venezuela’s Ali Rodriguez.
Following are the latest comments from OPEC members and analysts. The respective shares of supply are based on April levels. The estimates for the price each member needs to balance its budget are from the International Monetary Fund unless stated otherwise.
Price needed: $87.6 Share of OPEC production: 3.3 percent
Algeria tried, and failed, last year to organize a meeting of non-OPEC/OPEC members to push for output cuts, as years of declining crude production and low prices weighed on its fiscal deficit. A freeze by producers is needed immediately to stabilize prices, Salah Khebri, minister of energy and mines, said in an interview mid-May. “Our main message to the next OPEC meeting is that it needs to restore unity and work for the benefit of all members collectively,” he said.
Price needed: $93.14 (RBC Capital Markets) Share of OPEC production: 5.4 percent
Angola is seeking an IMF loan as state revenue plunges. Its over-reliance on strong oil prices leaves savings and levels of inward investment ‘‘highly vulnerable’’ to swings in the global economy, Fitch unit BMI Research said in e-mailed report.
Price needed: $75.16 (RBC Capital Markets) Share of OPEC production: 1.7 percent
Ecuador supported an oil-output freeze at the Doha meeting. Minister Jose Icaza met with his Venezuelan counterpart before the summit to discuss prices and seek to agree on a unified position. Icaza became Ecuador’s new oil minister in early May following the resignation of Carlos Pareja.
Unlike other OPEC members, Indonesia is still a net oil importer so the fiscal break-even concept is not applicable. Share of OPEC production: 2.2 percent
Indonesia rejoined OPEC at the Dec. 4 meeting, seven years after suspending its membership. It will stick to its plan to increase oil output this year even if some of the world’s biggest producers move to cap production, Energy and Mineral Resources Minister Sudirman Said said in February.
Price needed: $61.5 Share of OPEC production: 11 percent
The Persian Gulf nation is rebuilding its energy industry and restoring crude sales after the lifting of international restrictions in January. Exports are already at 2 million barrels a day, just short of pre-sanctions levels, the IEA said in a recent monthly oil market report. The head of the state oil company said the country -- a key advocate of output restraint in previous years -- has no plans to join any output freeze as it remains focused on restoring exports.
View Full Article
Copyright 2016 Bloomberg News.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Most Popular Articles
From the Career Center
Jobs that may interest you