OPEC is discussing how much oil it should remove from world markets following a price crash in recent months.
Members of the oil cartel meeting in Vienna on Thursday are ready to ignore President Donald Trump’s repeated calls to keep output steady. But the scale of the production cut remains subject to debate.
A senior OPEC delegate told CNN Business that members are trying to achieve a consensus to cut output by 1.3 million barrels a day. But OPEC’s de facto leader, Saudi Arabia’s energy minister Khalid Al-Falih, told reporters a cut on that scale might be “excessive” given a recent decision by Canada to scale back its production.
“The number that we need is going to be less than 1.3 [million] — is it a million, or slightly less, slightly more … we have all day today, and some of tomorrow to determine the best number,” Al-Falih said.
The Canadian province of Alberta announced last week it will pump 325,000 barrels a day fewer from January 1 because it is running out of space to store excess oil.
The market is awash with oil. The United States is pumping at record levels and recently surpassed Russia and Saudi Arabia for the first time since 1973 as the world’s largest producer.
Meanwhile, Iran is still selling crude despite American sanctions. The U.S. surprised OPEC and other producers by granting waivers to eight countries to continue buying Iranian oil after it reimposed sanctions in early November.
The International Energy Agency warned last month that supply is expected to exceed demand through 2019. In its November market report, OPEC said demand for its oil next year would be about 1.1 million barrels a day less than in 2018, and 1.4 million below current OPEC production.
Even if OPEC reaches an agreement on Thursday, it will need to persuade Russia to cut production too. The alliance between OPEC and the world’s second-largest producer dates back to 2016 when they first agreed to cut production to halt a damaging price collapse.
The meeting with Russia is scheduled for Friday.
US crude oil is now trading around $52 a barrel, down from a four-year high above $76 in early October. Brent crude has plunged to $60 from above $86.