OPEC And Non Members End Weekend Meeting With Sole Resolution Being To Keep Talking

Eighteen hours of talks in Vienna on Saturday among Organization of the Petroleum Exporting Countries (OPEC) members as a precursor to ratifying the production cutback deal later this month have ended with Brazil and Kazakhstan refusing to restrict its production and non OPEC nations failing to commit to play along.

BloombergMarkets reports that the only thing the participants agreed on was to keep on talking, which prompted Fabio Scacciavillani, chief economist at the Oman Investment Fund, to remark, "It's more likely that OPEC will come away with no decision in November than that they'll reach an agreement.

"If they are able to agree, it will likely be a wishy-washy deal that's hobbled by too many exemptions.''

Representatives of Azerbaijan, Brazil, Kazakhstan, Mexico, Oman, and Russia attended Saturday's meeting with officials from OPEC member states; but despite Mohammed Barkindo, secretary general for OPEC, warning of the consequences if the output agreement isn't ratified, Marcio Felix, oil and gas secretary for Brazil, made it clear his country wouldn't restrict its oil production; and Natiq Aliyev, energy minister for Azerbaijan, said "real numbers" have to be determined before cuts can begin.

Non-member Oman said it couldn't commit to a specific output cut until OPEC had its own agreement; Russia said it is willing to freeze production, rather than cut, but only if there is an internal OPEC agreement first; and Kazakhstan maintained that it will boost output next year following the restart this month of the $50 billion Kashagan oil field.

Saturday's meeting will presumably be followed by a meeting of Russian oil producers: Russian president Vladimir Putin has called for a gathering of domestic producers one week before OPEC reconvenes in Vienna on November 30 to further discuss oil cutbacks.

The meeting had been scheduled for November 9 but was postponed after discussions with Igor Sechin, head of Rosneft, who has repeatedly stated that OPEC has lost its influence due to the rise of U.S. shale producers.

The Kremlin and Russia's energy ministry refused to reveal the agenda for the November 23 meeting.

Reuters recently speculated that the options market "seems to suggest investors are betting against any deal when OPEC members meet in Vienna in late November," and that "Speculators hold nearly 10 percent more sell options than buy options for contracts expiring after the meeting on November 30, but this belies a more bullish picture."