EMEA News
OPEC: Output Freeze Will Push Prices Over $50/bbl
Despite widespread criticism over the oil output freeze proposed by Saudi Arabia, Russia, Qatar, and Venezuela, Mohammed bin Saleh al-Sada, energy minister for Qatar, said it could help move oil prices above $50 within a year.
Al Sada told CNNMoney that freezing production at January levels is "At the moment the best possible feasible proposal" and "will gather more and more approval because it is [in] the interest of all parties."
This is notwithstanding Iran recently dismissing the freeze, which was first announced on February 16, as "ridiculous" and Saudi Arabia last week declaring it will not cut its production if the proposal comes into effect.
Al Sada, who also holds the rotating presidency of the Organization for the Petroleum Exporting Countries (OPEC), went onto say that crude prices plunging 70 percent since 2014 is untenable for producers, but he noted that a year from now prices may exceed $50 a barrel due to over 500,000 barrels per day of higher cost production coming off the market.
As Ship & Bunker previously reported, Russia, for its part, has said it believes $50 per barrel oil would be adequate for consumers and exporters in the long term.
Ship & Bunker data suggests that with recent trends, $50 oil is likely to result in IFO380 in the $250 to $300 per metric tonne (pmt) range at major ports.
Earlier this week, CNBC analyst Jim Cramer blasted the much-maligned freeze as "a total hoax" and called traders who created an oil price rally based on rumours that OPEC members would consider a production cut "fools"; he warns that oil will drop back to $26 per barrel in the near future.
