Oil closes in low with pressure from Saudi Arabia and Russia

Oil closed in low strength on Thursday, 21, as the backstage and public demonstrations of representatives of the Organization of Petroleum Exporting Countries (OPEC) and cartel allies evidence that Iran is a lone opponent And the only impediment to reach a consensus by easing the production cuts under the agreement known as OPEC +, with consequent increase in the supply of the commodity.

The informal leaders of the OPEC countries and those who sign the pact independently, Saudi Arabia and Russia, are reportedly in a campaign to build the unanimity necessary to approve the reduction of the production cuts stipulated in the agreement. Today, the 24 OPEC + signatories maintain cuts of a monthly average of 1.8 million barrels per day compared to the October 2016 levels.
Not by chance, less than 10 minutes from the oil adjustment schedule of the WTI type, circulated a statement by the Iranian Petroleum minister, Bijan Zangeneh, that it is "unlikely" to form this consensus to change the pact. "We're not close to an agreement," he insisted.

To support the increase in oil delivery, Saudi Energy Minister Khalid al-Falih commented that the growth of shale oil production in the United States, particularly in the Permian basin, is facing challenges and must Decrease significantly over the next two years. In his vision, an increase in production in 1 million barrels per day is a "good goal" for OPEC +.
On Friday, 22, it takes place in Vienna, Austria, the official meeting only with members of OPEC, who join the Saturday representatives of the 10 non-cartel producers, but endorse the production cuts agreement.

In a report to customers, Commerzbank points out that due to the drastic decline in production in Venezuela, even if all other OPEC + signatories were strictly complying with their current production goals under the agreement, the offer of these producers would still be 600,000 Barrels a day below the stipulated. "This volume would have to be produced in addition to other countries, which is in line with a compromise suggested by Saudi Arabia and also supported by Ecuador."

The analysts of the German bank ponder, however, that it is not clear how this additional offer would be divided between nations individually. "What complicates things is the current situation in Libya, where oil production has decreased by 450,000 barrels a day in the last days following combat and the subsequent closure of two vital terminals for export," they write.
"As more than half of the reserve tanks in both ports were apparently damaged, no rapid normalization can be expected," concludes the Commerzbank.
The OPEC + puzzle seems to get more complex with each passing day, and for now there is no sign of a quick fix. (with information from Dow Jones newswires)

Source: This is money.

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