The Algerian energy minister says all major oil producers are on board over the need to stabilize the market in order to shore up prices which have fallen to their lowest point in more than five years.
Noureddine Bouterfa has been shuttling between Tehran, Moscow and Paris over the past week in preparation for an informal meeting in Algiers on Friday, which will bring together OPEC and non-OPEC members.
“Our discussions with our partners show that there is a consensus around the necessity of stabilizing the market. That is already something positive,” he said on Saturday.
Bouterfa made the remarks after meeting his Saudi counterpart Khalid al-Falih and OPEC Secretary-General Mohammed Barkindo in Paris.
“There is support from Saudi Arabia, Qatar, Iran, Venezuela, Kuwait, and from non-OPEC countries, notably Russia,” he added.
Participants in the Algiers meeting will be trying to build consensus around the need to take out additional barrels in the market. Barkindo said OPEC was not seeking a definite price range for oil but rather “sustainable stability” for the market.
Bouterfa has said OPEC members are trying to reach a price of $50 to $60 per barrel and that he is confident about the outcome of the Sept. 26-28 meeting in his country.
However, it remains to be seen whether such optimistic statements would translate into a clear-cut deal. The meeting in Algiers comes in the wake of the acrimonious collapse of talks in April.
Russian President Vladimir Putin has said Saudi Arabia was responsible for those failed attempts because “at the last minute, (they) changed their point of view” on reaching a production freeze pact.
The talks fell apart after Saudi authorities insisted that Iran must join the initiative to keep oil production at current levels.
With those differences hardly resolved, there are reports that participants in the upcoming talks would be moving from a production freeze to voluntary output caps.
Iran has been calling on OPEC to restore the quota system which was scrapped in December 2011 under the Saudi initiative. Since then, the kingdom has been pumping at full throttle, leading to a price crash which is hurting the Saudis themselves as well as other producers.
A possible freeze will keep OPEC production at 33.4 million barrels a day – a decision which is unlikely to improve prices. Moreover, allowing each producer to choose its own output level would do little to curb surplus production.
One positive outcome of the next OPEC meeting, however, could be that it would pave the way for future discussions and help avoid a repeat of the failed push for a freeze earlier this year.