A Saudi Arabia oil advisor reported on Thursday that nations who produce oil discuss a crude production freeze at the Organization of Petroleum Exporting Countries’ meeting in June, keeping a close eye on the prospect of action to bolster prices despite the collapse of deal-talk in Doha.
The Organization of Petroleum Exporting Countries’ meeting will be held on June 2.
The deal which was ongoing since February had supported oil prices to surge from a 12 year low hit in January.
However, it fell apart on Sunday in Doha after Saudi Arabia insisted Iran took part, emphasizing concerns in the Organization of Petroleum Exporting Countries of a renewed price decline.
According to a Saudi Arabia’s advisor, “Even though there was no agreement, the door for future cooperation remains open, and there sure will be further discussion at the next OPEC meeting in June.”
The Organization of Petroleum Exporting Countries Secretary General Abdullah Al-Badri, speaking at the same conference, reported some minsters may bring up the production freeze issue in June, but it wasn’t on the OPEC secretariat’s agenda.
Other OPEC members are still trying to get a deal. Nigeria’s oil minister reported that he will hold talks with Iran, Saudi Arabia, and other producers by May, hoping to end up with an agreement on June.
Crude prices initially plunged on Monday after the collapse of meeting in Doha, but Brent crude has since surged, hitting a 2016 high of $46.18 per barrel on Thursday, on indications that a supply glut which has weighed on prices may be reducing.
Both crude oil officials said that there were signals of a stronger market, with or without a producer deal.
As stated by Abdullah Al-Badri, “Doha or no Doha, we see that the market is turning. Maybe demand will be more than supply, and we see that the market by 2017 will turn around and it will be positive.”
However, consumer countries should not rejoice about the current low oil price environment, which might drag instability up and threaten the viability of main industries, an energy analyst stated.
“The total supply decrease may be as high as 1 million barrels a day in the second half of this year. This decrease is expected to continue next year. Low oil prices is a negative sum game, by that I mean everybody is losing,” the analyst added.