Energy Intelligence: Saudi Arabia proposes an agreement to balance oil market
Introduction 1. Energy Intelligence: Saudi Arabia proposes an agreement to balance the oil market
3 12 2015
(To add details, comments and oil price)
Dubai / Singapore December 3 December (Reuters) - Bulletin Energy Intelligence that Saudi Arabia will propose an agreement aims to achieve a balance in the oil market and includes a demand that Iran and Iraq, members of the OPEC reduction of production growth also includes the participation of non-members of the Organization countries such as Russia.
The bulletin said Saudi Arabia will call for reducing the production of the Organization of Petroleum Exporting Countries (OPEC) by one million barrels per day next year, but that is conditional on the commitment of the other Member States of the Organization and from outside producers such as Russia, Mexico, Oman, Kazakhstan concerted effort.
With regard to members of the OPEC countries it proposed agreement involves the Kingdom of Iraq proves that oil production at the current level of around four million barrels a day and engage Iran - which expects to lift Western sanctions imposed on them early in 2016 - in those efforts.
Analysts say it would be difficult to obtain Alaguetrah consent of all parties concerned as opinions vary about the producers who have production should be cut or capped.
Oil prices rose slightly, but traders are still cautious.
Said Rick Spooner, senior analyst at CMC Markets in Sydney. "The market would like to hear the views of other parties and to check on the possibility of achieving it. It does not lie only in the other producers approve the agreement, but in their commitment to it."
"The fact that Saudi Arabia is made of the proposal gives it greater importance."
Futures rose for ore from near their lowest levels in 2015 and Brent crude was 60 cents by 0538 GMT to $ 43.09 a barrel, while US crude rose 49 cents to $ 40.43.
Bulletin quoted a senior OPEC delegate as saying that he will not be implementing the agreement - if approved - by OPEC ministers meeting on the fourth of December Dessember or directly after the end of the meeting, but may be implemented in 2016.
But with that agreement it would be the first sign that Saudi Arabia - which so far resisted intervention in the market - is ready to reach a compromise after falling crude prices to less than half its level since June 2014 to up to less than $ 45 a barrel, with production rising around the scientist.
And resisted by Saudi Arabia and other allies in the Middle East - have large financial reserves and at a lower cost to extract the oil - calls for OPEC cut production to support prices as called for members of the organization has financial problems, such as Venezuela and Iran to cut production by major producers to support the market other countries.