OPEC will soon make efforts to convene before the next scheduled meeting in June as the slump in oil prices is hurting producers, including the world’s biggest exporter, Saudi Arabia, said Emmanuel Kachikwu, Nigeria’s minister of state for petroleum resources.
The 13 members of the Organization of Petroleum Exporting Countries will work toward meeting in early March, Kachikwu said in an interview in Abu Dhabi on Tuesday. Members are already engaged in informal discussions with some non-OPEC producers, including Russia, to join any future production cut to shore up prices, he said.
Even so, there’s been no formal request for an OPEC meeting, according to three delegates who asked not to be identified. And the U.A.E.’s energy minister said OPEC can’t change its policy because of low prices.
“We are definitely looking at a time frame in very early March,” Kachikwu said. “You will very necessarily have to have an OPEC meeting” because the group first has to meet and decide on its position before having formal meetings with other producers to coordinate a cut, he said.
Benchmark Brent crude closed at $43 a barrel on the day of the last OPEC meeting on Dec. 4, and was trading at $30.98 a barrel at 9:12 a.m. on Tuesday in London. OPEC, which supplies about 40 percent of the world’s oil, effectively abandoned output limits in December, potentially worsening a glut created after producers from the U.S. to Russia and Saudi Arabia pumped more than demand warranted.
Led by Saudi Arabia, Gulf Arab producers have poured cold water on previous calls for early meetings by cash-strapped members such as Venezuela and Algeria, saying that output cuts won’t work without the participation of big non-OPEC producers.
OPEC can’t change its policy because of low prices since the group’s strategy is working and there was a “major reduction in yearly increase from non-OPEC,” Suhail Al Mazrouei, energy minister of the United Arab Emirates, said at a conference in Abu Dhabi on Tuesday.
No OPEC members, including Saudi Arabia, are happy with the slide in prices since the group’s last meeting in December, Kachikwu said earlier at a conference in Abu Dhabi. He didn’t wish to name the member countries seeking an early meeting, and said that in December, Saudi Arabia was supportive of such meeting, if there was consensus for it.
After the lack of consensus at the December meeting, OPEC ministers knew oil prices would fall, Kachikwu said. High-cost shale oil producers are showing resilience to low prices and “are becoming a constant equation in the oil dynamics,” he said.
“I certainly hope that it doesn’t go below $30 for the sake and survival of everybody” Kachikwu said. “My perception is that we will see it get worse before it gets better.” Oil is seen ending the year at $40 to $50 a barrel, he said.