OPEC Makes Last-Ditch Effort to Save Oil Deal as Tensions Grow

The oil slump has hammered producers around the world.The oil slump has hammered producers around the world.

OPEC was trying on Monday to rescue a deal to limit oil output as tensions grew among the producer group and non-OPEC member Russia, with top exporter Saudi Arabia saying markets would rebalance even without an agreement.

OPEC experts started a meeting in Vienna on Monday and were due to make recommendations to their ministers on how exactly the Organization of the Petroleum Exporting Countries should reduce production when it meets on Nov. 30, Reuters reported.

Meanwhile, the Algerian and Venezuelan oil ministers were to travel to Moscow on Monday and Tuesday in a final attempt to persuade Russia to take part in cuts instead of merely freezing output, which has reached new highs in the past year.

In September, OPEC, which accounts for a third of global oil production, agreed to cap output at around 32.5-33.0 million barrels per day versus the current 33.64 million bpd to prop up oil prices, which have more than halved since mid-2014.

The meeting on Nov. 30 was expected to rubber-stamp that deal, with Russia and some other non-OPEC producers such as Azerbaijan and Kazakhstan also contributing.

On Friday, OPEC canceled an experts meeting with non-OPEC producers scheduled for Nov. 28 after Saudi Arabia said the organization needed to sort out its differences first.

Over the weekend, Saudi Energy Minister Khalid al-Falih said oil markets would rebalance even without an output-limiting pact.

That contrasted with his previous statements, in which he had said Riyadh was keen for a deal.

OPEC ministers started arriving in Vienna on Sunday for the group's regular twice-yearly talks but Falih was not expected to land before Tuesday evening, leaving little time for traditional pre-meeting discussions with peers.

According to Iran's Oil Ministry's official news service, Shana, the country's Oil Minister Bijan Namdar Zanganeh is expected to leave Tehran for Vienna today.

  $490b Riding on OPEC Decision

After two tough years of falling oil prices and company valuations, investors in the world’s biggest energy producers have some cause for hope as crude prices continue their recovery from a 12-year low. They will be looking to OPEC not to dash it.

Oil companies around the world have together added $490 billion to their market value this year, the biggest gain in six years following a 25% rise in benchmark Brent crude, according to data compiled by Bloomberg. This follows a $850 billion loss in value last year and $720 billion in 2014 as crude prices plunged.

The oil slump has hammered producers around the world, from giants like Royal Dutch Shell Plc to exploration minnows. They have piled on debt, canceled billions of dollars of projects and slashed jobs to ride out the downturn. In September, the Organization of Petroleum Exporting Countries gave these companies hope by reversing a two-year policy of pumping at full throttle and agreeing instead to cut production. Yet, the group is struggling to overcome obstacles to implementing the deal.

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