OPEC, Russia see smooth road to global deal on output cut

Sat Dec 10, 2016 5:13am EST
 
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By Vladimir Soldatkin, Rania El Gamal and Alex Lawler

VIENNA (Reuters) - Russia and Saudi Arabia said they expect OPEC and non-OPEC producers to reach an agreement on Saturday to curtail oil output and prop up prices in the first such joint move since 2001.

"We have a deal already. We are just putting the final touches. Everything is good!" Khalid al-Falih, energy minister of OPEC's de facto leader and top oil exporter Saudi Arabia, told reporters.

Russian Energy Minister Alexander Novak, speaking as he joined a breakfast with OPEC and non-OPEC ministers in Vienna, said: "I don't see such risks (of a deal failing)."

The Organization of the Petroleum Exporting Countries began a meeting with producers from outside the group at 0930 GMT, hoping non-OPEC will commit to cutting 600,000 barrels per day after its own members agreed a reduction of 1.2 million bpd last week.

Oil prices have more than halved in the past two years after Saudi Arabia raised output steeply in an attempt to drive higher-cost producers such as U.S. shale firms out of the market.

The plunge in oil to below $50 per barrel - and sometimes even below $30 - from as high as $115 in mid-2014 has helped reduce growth in U.S. shale output.

But it also hit the revenues of oil-dependent economies including Saudi Arabia and Russia, prompting the two largest exporters of crude to start their first oil cooperation talks in 15 years.

OPEC Secretary-General Mohammed Barkindo said he expected 12 non-OPEC countries to sign a declaration with the organisation and fully contribute to cuts of 600,000 bpd or more.   Continued...

 
Saudi Arabia's Energy Minister Khalid al-Falih talks to journalists during a meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, Austria, November 30, 2016. REUTERS/Heinz-Peter Bader/Files