Oil cartel works to cut output

The global oil cartel, OPEC, and its allies are working toward a deal to further reduce oil output and raise prices, which has seriously fallen in the last week. According to sources close to the talks, the oil-producing nations eye cutting output by at least 1.3 million barrels per day, but need to convince Russia to join the measure.

OPEC meets on Thursday in Vienna, followed by talks with allies such as Russia on Friday, amid a drop in crude prices caused by global economic weakness and fears of an oil glut due largely to a rise in US production. The producer group's de facto leader, Saudi Arabia, has indicated a need for steep reductions in output from January but has come under pressure from US President Donald Trump to help support the world economy with lower oil prices.

The sources said the meetings were taking place in a difficult environment and that Russia's position would be key in reaching a deal. “Russia is playing tough,” one of the OPEC sources said. According to another, “the Saudis are working hard on the cut. But if Russia says no cut, then we (OPEC) won’t cut.”

The Saudi and UAE energy ministers, Khalid al-Falih and Suhail bin Mohammed al-Mazroui, said on Tuesday that an adjustment in global oil output was required but all producers must be on board. “The next road to cross is whether all countries are willing to come on board and contribute to that cut,” Falih told Bloomberg. Russian sources have indicated Moscow could contribute some 140,000 bpd to a reduction, but Middle East-dominated OPEC insists Russia cut by 250,000-300,000 bpd.

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