OPEC ponders strategy, but lacks options to raise oil price

OPEC ponders strategy, but lacks options to raise oil price

OPEC ponders strategy, but lacks options to raise oil price

Oil prices rose on Friday as OPEC ministers met in Vienna, while the dollar was around minimum of a month, a day after staging its biggest one-day drop in nearly seven years.

He does not expect OPEC to change its production policy unchanged, but the nervousness among traders and investors were high.
The Organization of 12 nation of Petroleum Exporting Countries began meeting Friday with oil prices above US marginally reference, but just above $ 40, near the lows of the global economic crisis seven years ago.
OPEC has cut output in the past to double the supply and raise prices. But cutting production levels could not give a lasting boost, with non-OPEC countries such as Russia and America still going strong.
In addition, some OPEC members are already selling at a loss and so cut now would hurt even more economically.
Instead, OPEC production may increase. Sanctions on Iranian oil sales are nearing completion, Indonesia is about to be reinstated as a member and Iraq production is becoming strongly after years of conflict.

OPEC ponders strategy, but lacks options to raise oil price

Brent oil futures were last up 65 cents to $ 44.49 a barrel by 1100 GMT, after falling earlier this week to a low of $ 42.43 in pennies 6-1 / 2 years until August.

Oil futures rose 55 cents to $ 41.63.In recent weeks, investors have made great pessimistic bets or short positions, betting on a fall in the price of oil, which could be quickly reversed if OPEC were to give any sign that could adjust its position on the offer.

“Markets are sitting on their hands right now,” said Saxo Bank Ole Hansen general manager.

The dollar rose, which normally lower oil prices and that this force may encourage non-US investors crude to sell their shares in exchange for a higher profit in its own currency.

But 2 percent drop in the dollar Thursday, caused by a rising euro, left the dollar near its lowest level in a month before the US monthly jobs report that could cement expectations for the first increase in US rates American in almost a decade since the Federal Reserve this month.

In Vienna, members poorest OPEC were increasing pressure on their counterparts richest led by Saudi Arabia to cut supply, but Riyadh and its allies appeared Friday to be ready to continue with its strategy of rate protection market .

OPEC ponders strategy, but lacks options to raise oil price

“What OPEC has on its side is the market is quite rudely, then there is a series of shorts out there … if we see something that looks like a move toward price stabilization, then we could see ( oil) move 20 or 25 percent higher within a very short time, “he said.

The oil minister of Saudi Arabia, Ali al-Naimi said before the meeting growing global demand could absorb an expected jump in Iranian production next year.

On the demand side, China is likely to double its strategic oil purchases next year to take advantage of more than 60 percent drop in oil prices since June 2014.

Beijing will add 70 million-90 million barrels of crude oil storage tanks in 2016 to build its strategic oil reserves (SPR), according to most respondents in a five analysts and data collected by Reuters analyst survey.