Tuesday, September 27, 2016

OPEC is pumping more oil than ever before

OPEC’s second largest producer has thrown its weight behind an oil output freeze.
Iraqi oil minister Jabbar Al-Luiebi said his country is willing to freeze production — or even cut it — if a consensus emerges at a meeting of major oil producers that starts Wednesday in Algiers.
“If the freeze is going to have a positive impact on prices, then we agree with the freeze,” Al-Luiebi told CNNMoney on Tuesday. “I am optimistic.”
Yet it’s not clear that a deal, long sought by some OPEC producers, is within reach. Both Iran and Saudi Arabia have said that the meeting is merely “consultative.”
The idea is that an output cap will help put a floor under prices, which have risen from $26 per barrel in February to $45 but are still down more than 50% since 2014.
Critics say any freeze would be mostly symbolic — OPEC is pumping more oil than ever before, and freezing production at extremely high levels wouldn’t really help fix an oversupplied market.
Oil prices have bounced before on hopes of a freeze, only for them to be dashed when talks collapsed.