OPEC+ Near Deal to Redistribute Oil Cuts Amid Saudi Pressure (1)
2019-12-06 11:48:57.535 GMT
By Grant Smith, Salma El Wardany, Golnar Motevalli and Dina Khrennikova
(Bloomberg) -- OPEC+ was on the verge of a deal to
redistribute production cuts between its members under pressure from Saudi Arabia, which has long carried an outsized share of the burden. The group, which pumps more than half the world’s oil,agreed in principle at a marathon negotiation on Thursday to reduce its output target by 500,000 barrels a day, bringing it in line with recent production levels. Saudi Energy Minister Prince Abdulaziz bin Salman gave a clear signal that his priority was to get some members to stop cheating and implement
the cuts they have promised. “Like religion, if you are a believer you have to practice. And without practice you are an unbeliever,” Prince Abdulaziz
said at the opening session of Friday’s meeting. “The market will have to trust us. The analysts will have to believe us” and if they don’t “we cannot deliver what we want to achieve. It is as simple as that, and sometimes it is as tough as that.” After days of rumor and mixed messages that whipsawed prices, the shape of the adjusted deal between the Organization of Petroleum Exporting Countries and its allies gradually emerged. Oil futures fell in New York on Friday as it became clearer that the group wasn’t planning to remove any additional barrels from the market. Instead, delegates said it was poised to rejig its deal to formalize the extra supply reductions some of its members, notably Saudi Arabia, have already been making for most of the year. Then it would share them out more equitably among the countries that have consistently failed to meet their targets. Saudi Arabia, the world’s largest oil exporter and the group’s defacto leader, will continue to pump at current levels under the new agreement, said delegates, who asked not to be named because the information isn’t yet public.