Oil prices down in world market

31 October 2016 15:57 (UTC+04:00)

By Nigar Abbasova

Global oil prices were negatively affected by the technical OPEC meeting in Vienna as non-OPEC producers failed to make any specific commitment to join the cartel in limiting oil output levels to prop up the prices.

Brent crude was 0.6 percent down and stood at $49.42 a barrel, while WTI crude futures stood at $48.41 per barrel.  

A sit-down between officials and experts from OPEC and non-OPEC producers including Azerbaijan, Brazil, Kazakhstan, Mexico, Oman and Russia ended fruitlessly, as the sides only agreed to meet again in November before a scheduled regular meeting of the cartel.

In a joint statement, the participants said the meeting was a "positive development" towards reaching a deal. However, experts and traders assessed the meeting as a sign of a deadlock. The inability of non-OPEC states to find a consensus is mainly triggered by the differences within the cartel itself.  

Discord among OPEC members is expected to weigh on oil prices as investors mark down the probability that a supply management efforts will practically materialize.

Valentin Zemlyansky, director for energy programs at the Center of World Economy and International Relations at the Ukrainian National Academy of Sciences, told Trend that there are no preconditions for fundamental changes in the oil market, mentioning that the cartel and other producers didn’t did not show their willingness to cut the oil production.

A number of questions still remain unanswered for the market, including non-determined position of Russia and unwillingness of Iraq to join the deal.

Moreover, Iran and Iraq earlier said OPEC was underestimating their production, while Russia expects to increase its oil output by 0.7 percent next year and a further 0.9 percent in 2018.

The next technical meeting of the members of the cartel and non-OPEC states on oil market stabilization is scheduled for November 25-26.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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