OPEC and Russia talk about teamwork to address oil crash

Senior officials of OPEC and the Russian oil industry on Monday fueled speculation about a possible joint to remedy one of the worst situations of oversupply of crude in decades action, although Saudi Arabia was determined to be that the market is balanced by itself .

The last set of comments highlights the growing pressure that the barrel of oil at $ 30 has on countries like Russia, although there seems to be a real step towards concerted action to reverse the collapse in prices, repeatedly mentioned and discarded idea last year.

The secretary general of OPEC, Abdullah al-Badri said in London that other producers could work together with the organization for the excess supplies that prices recover, basically reiterating the view that the cartel would consider cutting the pump if other They do the same.

Russia, seen by many as the main obstacle to an agreement, has so far refused to cooperate despite a barrel to $ 30 is much less than what you need to balance your budget.

But the devaluation of the ruble and with elections in sight, the Kremlin is under pressure to protect their income and avoid popular discontent.

“In my opinion, if the political decision (to cut supplies to support prices) is taken, Russia should work with OPEC to reduce supply to the market (…) It is better to sell a barrel of oil to $ 50 two to 30, “he told the news agency TASS Leonid Fedun, vice president of Lukoil, the second largest oil producer in Russia.

The market did not seem to pay much attention to what was said on Monday, and the price of a barrel of oil is more than 5 percent sank to around $ 30.

The president of the state Saudi Aramco, Khalid al-Falih said that continue to invest in production despite deep cuts in costs in the industry, and markets would probably soon find balance at a price of “moderate” oil.

And there seems to be indications of a change in position of Saudi Arabia, which in late 2014 led OPEC to change its strategy for protecting its market share, not prices.

Bernstein analysts said that spending on exploration and production excluding OPEC would fall 18 percent this year if prices average $ 50 a barrel and would plummet 38 percent with oil at $ 30.

The collapse in prices is financially strangling producing nations like Venezuela, which depend mainly on oil revenues and can not increase production.

Venezuela has called an emergency meeting of OPEC to discuss measures to remedy the low prices. But Gulf OPEC members have opposed this.

The energy minister of Qatar said OPEC is considering the need to convene an extraordinary meeting following a request to that effect.

Meanwhile, Ecuador’s hydrocarbons minister said his country supports an emergency meeting of OPEC to make a decision regarding oil prices.

So far, only Oman and Azerbaijan, which are not part of the OPEC have expressed their willingness to cut production together with OPEC.

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