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Oil price down, as OPEC uncertain over production cut plan

Published 11/29/2016, 01:14 PM
Updated 11/29/2016, 01:32 PM
© Reuters.  In-fighting may scuttle deal.

© Reuters. In-fighting may scuttle deal.

Investing.com - A proposed production cut accord by members of the Organization of Petroleum Exporting Countries (OPEC) appears to have collapsed.

In-fighting amongst the industry players from Iran, Iran, Saudi Arabia and other OPEC members may have scuppered the deal, and financial markets are eyeing events in Vienna closely as the outcome could determine oil prices for the next year. If talks collapse, analysts see oil in the $30s per barrel, but if it proceeds, oil could stay above $50 or more. West Texas Crude Oil settled at $45.23, a decrease of 1.85, and Brent Crude Oil settled at 46.37, a decline of 3.88% .

Analysts expect Saudi oil minister Khalid al-Falih to come to the meeting and restore the consensus, thought to be obtained prior to the meeting in informal talks. Iranian concerns are said to be the most difficult to resolve at this time by analysts. This may be something of a replay of the doings last April, when the Iranians insisted on retaining market share, while the Saudis wanted a production freeze.

Last spring, it was said that Saudi Deputy Crown Prince Mohammed bin Salman shut down the talks over Iranian objections. A planned public offering of Saudi Aramco next year by the Saudis is another factor weighing on the production cut talks.

Iran's energy minister is already in Vienna, and proclaims that Tehran was not going to cut production.

"We will leave the level of production where we decided," Iranian Oil Minister Bijan Zanganeh told reporters yesterday.

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