What´s next for OPEC? Analysts are expecting prolonged production cuts as Saudi Arabia and Russia still debate what course to follow. These high expectations, coupled with a recent surge in bullish bets on crude, amplify the risk to prices if the group can’t convince a hesitant Russia that it’s necessary to agree an extension right away, Bloomberg reported.
Oil climbed to two-year high in New York in Wednesday in anticipation of reduction in oil shipments from the Organization of Petroleum Exporting Countries and its allies. All of the 36 analysts and traders surveyed by Bloomberg expected an extension, with another nine months of cuts the most popular prediction.
According to Saudi Arabia’s Energy Minister Khalid Al-Falih OPEC should announce an extension of the curbs in Vienna next week. Only problem could be Russia. Representatives of the dominant non-OPEC member have reservations.
It´s too early to announce anything this month. Consultations between these two countries are under way as Saudi Arabia feels convinced that Russians will be fully on their side. Another member, Kuwait, also believes that the decision should not be taken closer to expiry.