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OPEC Prepared To Call ‘Extraordinary Meeting’ As Oil Falls

Just a couple of weeks after OPEC and its partners agreed to implement another round of production cuts, the cartel is ready to extend these cuts as international prices continue to fall.

Reuters reports, citing the oil minister of the UAE, that OPEC is prepared to call an extraordinary meeting as it enters “whatever it takes” mode yet again.

Earlier this month OPEC, Russia and nine more producers agreed to reduce their combined oil output by 1.2 million barrels daily, with OPEC’s share at 800,000 bpd. However, the news failed to impress a market worried about global economic growth and consequently crude oil demand.

Speaking at a news conference in Kuwait, UAE’s Suhail al-Mazrouei said it would not be a problem for the cartel to extend the period of the cuts, initially set at four months, beginning in January.

“What if the 1.2 million barrels of cuts are not enough? I am telling you that if it is not, we will meet and see what is enough and we will do it,” Mazrouei said, adding “The plan (to cut oil production) is well studied but if it does not work, we always have the power in OPEC to call for an extraordinary meeting. If we are required to extend for (another) six months, we will do it… I can assure you an extension will not be a problem.”

While the mood in OPEC appears to be on the worried side, Argus Media expects oil prices to stabilize early in 2019 as the cuts take effect. CNBC reports, citing the energy data provider, that it sees Brent crude at an average of US$65 a barrel during the first quarter of 2019, rising to US$68 a barrel in the second quarter and further to the low US$70s in the third quarter of 2019.