Saudi Gives Signal of Not Cutting Production

Saudi Arabia, the OPEC leader signaled Wednesday it was not likely to push for a major change in the output of oil at OPEC’s group meeting scheduled for Thursday November 27.

This comes a day after Russia refused to be cooperative in any cut in production.

Ali al-Naimi, the Oil Minister in Saudi Arabia said he believed the oil market would stabilize itself at some point. However, he did not make any comments on talks that were held on Tuesday with Russia, which produced no solid pledge from Moscow to help with the falling price of oil.

Bijan Zangeneh the Oil Minister in Iran said some members of OPEC, although not Iran, were getting set to battle over the market shares and had insisted that producers who were non-OPEC, needed to take part in any output cut that was OPEC-led.

Zangeneh said to reporters that the most important thing OPEC needs is solidarity and unity and in this particular situation the contribution of producers who are non-OPEC.

He added that some members of OPEC believe that the time is now to defend the market share.

On Thursday, OPEC’s meeting will be one of its most important in recent time, with the price of oil tumbling over 30% since mid June to under $79 a barrel because of the booming shale oil output in the U.S. and slower economic growth globally.

Amongst the 12 members of OPEC, Iraq and Venezuela have said there needs to be a cut in output. Naimi has not made any comment as to what OPEC should do.

OPEC usually has huge tensions from its membership ranks but as talks over the nuclear program in Iran ended with no agreement Monday, most members felt a relief they would not have to deal with a big deluge of oil from Iran, which is currently hit by sanctions from the West.

Russia, a non-OPEC member, which produces more than 10.5 million barrels daily or just over 11% of the global output, came to the meeting on Tuesday amidst hints it could agree to an output cut as it has suffered from the price decline for oil and sanctions from the west due to Ukraine.

However, after the meeting that included Mexico another non-OPEC member and Venezuela, Russia’s top oil official said Russia would not reduce output.

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