EMEA News
A "Growing Consensus" Within OPEC Over Reducing Oil Glut
Nigeria's oil minister, who is meeting his Qatari and Saudi Arabian counterparts next week to discuss production output, believes there is growing consensus amongst Organization of the Petroleum Exporting Countries (OPEC) members that a decision on how to resurrect oil prices must soon be made.
Emmanuel Ibe Kachikwu told Reuters, "There's increased conversation going on; I think when we met in December ... they (OPEC members) were hardly talking to one another, everyone was protecting their own positional logic.
"Now I think you have cross-logic ... they are looking at what are the deficiencies, what is the optimum."
The motivation is said to come from the crumbling economies of members heavily dependent on oil income as well as the failure of Saudi's high-output strategy to escalate prices, despite it causing declines in U.S. shale production.
Kachikwu said nothing had come of the many past calls by countries such as his and Venezuela for emergency meetings because "We haven't been sure that if we held those (emergency) meetings that we could actually walk away with some consensus."
Kachikwu's remark seems somewhat contradictory considering that in December he told reporters that if prices didn't recover by February, "then obviously we're in for a very urgent meeting."
Moreover, Kachikwu, who was also the president of OPEC until two months ago, concedes that the growing consensus of members doesn't include any concrete strategy: "In terms of production reduction or freezing, no, I don't think we have got there; but there is a lot of energy (behind the idea)."
He added that as the June date for OPEC's next regular meeting approaches, "you are going to see a lot more people get active in those conversations and try to find solutions."
Earlier this month, John Kilduff, founding partner of Again Capital, told CNBC that "This whole story line about there being a coordinated production cut plan is just rubbish" and predicted that oil will fall to $18 per barrel before the market rebalances.
