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Azerbaijan to join Vienna meeting of OPEC High-level Committee

25 November 2016 17:30 (UTC+04:00)
Azerbaijan to join Vienna meeting of OPEC High-level Committee

By Nigar Abbasova

While the world energy market is in anticipation of the upcoming OPEC decisive meeting in Vienna, market complexities and uncertainties are still looming over the possibility of reaching a consensus.

OPEC will hold the second meeting of the High-level Committee on the Algiers Accord, which was set up to work out the details of the deal, on November 28.

Resource-reach Azerbaijan will participate in the meeting, which is expected to bring together OPEC states and oil producers outside the cartel. Azerbaijani Energy Minister Natig Aliyev will attend the meeting to be held in Vienna, Austria.

Aliyev recently announced that bolstering ties between Azerbaijan and OPEC through dialogue and consultations will pave the way for “reaching an advantageous agreement on the possible output reduction, mentioning that any decision of the cartel, whether it would be a freeze or cut of oil production, will have a “stimulating influence” on uplift in prices.

Some six countries outside the group, including Azerbaijan, Brazil, Kazakhstan, Mexico, Oman and Russia were also among the participants of the technical meeting of the group on October 29 in Vienna.

The chain of meetings, which started with the ministerial gathering in Istanbul, is assessed by market watchers as a signal that unlike in the first half of 2016, the group is more serious now about managing the global supply glut, bringing a balance and propping up prices.

Oil prices were down in trading on November 25 with international benchmark Brent crude futures trading at $48.55 a barrel, and its U.S. counterpart WTI standing at $47.56.

The cartel will consider 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.

A deal, if reached is expected to initially be applied over six months and then reviewed, while worries about internal disputes within OPEC, as well as uncertain position of certain countries outside the cartel remain among the main hindrances of the deal. Moreover, recent output increases to record levels in many countries further adds fuel to the challenge of rebalancing.

The preliminary Algiers Accord is expected to become what it called the first output cut in eight years.

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

Follow us on Twitter @AzerNewsAz

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