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Oil price falls again as Saudi Arabia and UAE reject cuts

All eyes will be on Vienna today as Opec meets to discuss production cuts to boost tumbling oil prices

Oil prices fell yet further yesterday after Saudi Arabia indicated that it would not seek output cuts to try to drive up prices at its meeting today in Vienna.

Brent crude, the international benchmark, slid 58 cents to $77.75 after Saudi Arabia appeared to reject production cuts and the US Energy Information Administration said that American crude stocks had risen by 1.9 million barrels last week.

Opec members known to be pushing for output cuts include Venezuela and Iraq. However, United Arab Emirates oil minister Suhail bin Mohammed al-Mazroui indicated yesterday that he agreed with the Saudi position and did not see any need for drastic action.

"We are not going to panic, this is not the first time, this is not a crisis that requires us to panic," al-Mazroui told Reuters. "We have seen [oil prices] way lower."

Mazroui said that Opec needed to consider long-term solutions.

"We are not interested in the short fixes because we know they will not last," he said.‎"Opec should not in my view be the only one who is fixing this problem – Opec did not make the oversupply.

"The oversupply came from the evolution of the unconventional oil production... I think everyone needs to play a role in balancing the market, not Opec unilaterally."

After an impromptu four-way meeting ahead of the summit between member states Saudi Arabia and Venezuela and non-members Russia and Mexico, the Russian energy minister Alexander Novak made clear that Moscow would not comply with production cuts.

Some analysts predicted that the conference may continue for longer than usual as member states argued their positions.

"It might take a bit longer than the ordinary meetings," one delegate told the BBC. "They must agree, even if they have to stay here for two days. It is a matter of death or survival for budgets."

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