Americas News
Venezuela Gets Luke Warm Response on Continued Calls for Crude Output Cuts
Eulogio Del Pino, Venezuela's oil minister, is said to have received a luke warm response from separate meetings with Russian Energy Minister Alexander Novak and Igor Sechin, CEO of Rosneft, intended to convince the Russian oil producers to cut production, Bloomberg Business reports.
The two meetings are said to have garnered Del Pino little more than promises of further discussions, with Novak saying that he would be open to attending a meeting with the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC producers, should one occur.
"It would make no sense to collaborate with only Venezuela, with no support from other OPEC members, more powerful Arabic countries," said Alexander Kornilov, oil analyst at Moscow-based Aton.
Following Del Pino's Russian meetings, he is reported to be headed to Qatar, Iran, and Saudi Arabia to lodge Venezuela's plea for reduced crude output volumes.
"There's a minimal chance the Venezuelans will get them to agree to anything," said Robin Mills, CEO of Dubai-based oil consultant Qamar Energy, of Venzuela's aim to convince Russia and Saudi Arabia cut production.
"I don't think the conditions are there for an agreement," Mills added.
Venezuela’s President Nicolas Maduro is also reported to have said that producing countries are "close to an agreement," but did not provide further details.
"They’ve been calling for action for the last two years now," said Edward Bell, commodities analyst with Emirates NBD PJSC.
"There’s empathy in this region for the harder-off OPEC members, but I don’t think that’s going to be enough."
Saudi Arabia is said to be open to cooperation to manage oil markets if participation from OPEC members and other producers is secured.
"The Saudis may want to take some oil off the market," said Mills
"They can talk to the Russians, they can talk to the Venezuelans, they can talk to the Nigerians, but they can’t talk to shale."
Venezuela is one of the OPEC members facing particular difficulty in the declining oil markets, with Ship & Bunker reporting in December the country could have difficulty meeting its debt obligations in early 2016.
On Tuesday, Ship & Bunker reported that a new Goldman Sachs report stated that "it may already be too late for OPEC producers to be able to prevent another large decline in prices."
