Economy

Saudi and Russia Disagreement Will Result in "Fudged" OPEC Summit: PVM

Saudi and Russia Disagreement Will Result in

Russia's Vladimir Putin and Saudi Arabia's Mohammed bin Salman may discuss oil supplies at the summit in Argentina. Bloomberg reported that OPEC delegates said the leaders have given their political blessing for an agreement, but the size of any cap still has to be talked through.

"It's hard to predict where oil prices will go from here but they have been heavily oversold", he said.

Along with a couple of other non-member producers, the OPEC-Russia meeting will be the major event in commodities this week and for the final month of 2018.

The unity Putin and the Saudi crown prince showed at the G-20 meeting amid all the controversies shifted the momentum in favor of a new agreement, said Ildar Davletshin, an oil and gas analyst at Wood & Co.

Prices of the global benchmark, Brent crude went tumbling about a third from an October high due to multiple reasons including rising supply from the US shale regions, Saudi Arabia and Russian Federation, slower demand growth and American waivers on oil sanctions on Iran.

Crude Oil prices gapped higher on Dec 2 rising more than 3%.

Hence the pressure for this week's meeting to take a definitive step and cap product, as they did in 2016 and helped boost oil prices to those near four-year highs in early October from early 2017.

On Friday, oil prices extended losses as piling stockpiles further dampened entrenched concerns over supply surplus, offsetting to some extent market expectations on potential output cut from OPEC and its allies.

To the adoption of this decision calls on Saudi Arabia amid a 30 percent collapse in oil prices towards the beginning of October.

On Thursday, the price of NY crude ducked below $50 per barrel for the first time in nearly 14 months.

On Tuesday, oil prices dropped slightly ahead of the scheduled OPEC meeting. However, WTI prices lost 20.9% in November. (WTI) crude futures were at $53 per barrel at time of writing, up $2.07 per barrel, and 4.1% from last close. February Brent settled at $US59.46, down 45 cents, or almost 0.8%.

There was no immediate word from the Saudis, but financial markets have been expecting the deal to be renewed between the kingdom and non-OPEC member Russian Federation as the cartel prepares to meet next week in Vienna.

Meanwhile, the number of active drilling rigs in the United States decreased by three to 1,076 in the week ending November 30. That came after another rise in United States oil stocks - for the 10th week in a row.

American drillers pumped 11.475 million barrels a day, the U.S. Energy Information Administration said, eclipsing Russian Federation for a second month as the world's biggest producer.



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