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Contrary to public statements, Saudi Arabia is concerned about a further decline in global oil prices, already at their lowest in over two years. Yet the world’s unofficial swing producer is unwilling to shoulder sole responsibility of balancing oil markets without a contribution from other OPEC members, a senior Gulf source tells MEES.
Saudi Arabia seems likely to wait out the current slide in oil prices that Saudi oil guru Ibrahim al-Muhanna does not see falling below $90/B in the near term.
OPEC ministers are set to meet in Vienna at the end of November to determine whether current weak fundamentals justify a cut in production in the first half of next year. ‘Abd Allah al-Badri, the group’s Secretary-General, has implied that the 12-member producers’ club might need to cut the long-standing collective target of 30mn b/d by 500,000 b/d. This would bring output closer to the organization’s forecasted ‘call on OPEC,’ which it recently revised down to 29.45mn b/d for 2014 and 29.2mn b/d for 2015 (MEES, 12 September). These forecasts are both down 160,000 b/d from those made by OPEC a month earlier.
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