Azernews.Az

By Nigar Abbasova

Doubts over the possibility of the oil cut deal regained its dominance in the energy market as worries about internal disputes within OPEC strengthened following the technical conference in Vienna.

Oil turned negative in volatile trade on November 23 on worries that certain countries were not ready to cut the oil output, which would be the group's first supply-limiting deal since 2008.

International Brent crude oil futures slipped 8 cents to $49.04 a barrel, while U.S. West Texas Intermediate (WTI) crude recorded a decrease of 8 cents and stood at $47.95

OPEC officials tried to draw up the details of an agreement to cut output before a formal meeting during the second assembly of the High-Level Committee. OPEC experts were reported to make some progress on the first day of a two-day meeting, but uncertainty coming from of Iran, Iraq and Indonesia about the level of their participation bolstered problematical character of the deal.

The cartel will debate an oil output cut of 4.0-4.5 percent for all of its members except Libya and Nigeria next week, while the cut is expected to bring OPEC's current output down by more than 1.2 million bpd.

While a ceiling for overall OPEC production is expected to be agreed in the anticipated meeting, it is still unclear whether quotas would be set per each member state.

While the market is still suffering greatly from supply glut and seeking to bring production into line with consumption, any deal is expected to initially be applied over six months and then reviewed. Moreover, even if the deal is reached, the oil market may remain oversupplied, should there is a renewed rise in oil production in the US, where drilling activity has been rising sharply.

The volume of petroleum import from OPEC countries averaged at 3.422 million barrels per day in the first eight months of 2016, as compared to averagely 2.816 million barrels per day in the same period in 2015, according to the Monthly Energy Review of the US Energy Information Administration (EIA).

Petroleum import from non-OPEC countries averaged 6.662 million barrels per day in therepoerted period, as compared to averagely 6.720 million barrels per day in the same period in 2015. Oil production from countries outside the OPEC currently represents about 60 percent of world oil output.

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

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