Ahead of today’s meeting of the Organisation of Petroleum Exporting Countries (OPEC) in Vienna, Austria, the Minister of State Petroleum Resources, Dr Ibe Kachikwu has expressed optimism that group would reach an agreement on production cuts to boost prices.
The meeting which comes as a deep division between Iran, Iraq and Saudi Arabia threatened to derail an earlier accord in Algiers, late September to freeze production.
The Algiers accord to led to a minor rally in the price of crude oil as it briefly rose above the $50 per barrel mark for the first time in over a year.
But possible failure the firm up the deal amid wrangling between the Middle East rivals has seen the prices fall below $47pb on Tuesday.
But speaking on CNN, Kachikwu all OPEC members are focused on reaching an agreement for production cut.
He however warned that OPEC constitutes just 30 percent of oil producers, and others need to get on board for the deal to impact positively on oil prices.
He said: “We are very optimistic. All signs are that everybody is focused on finding a solution. So everybody attending this meeting is very optimistic that we should reach some resolutions.
It is difficult to predict oil prices these days because there is a lot of uncertainties but we will expect that quite frankly if reach some resolution on this issue it will take oil price above the mid- 50s ranges and potentially upward, if we don’t obviously we will have negative impact on prices as they are today, currently about $48pb.
“OPEC can only do what it can and I think it is making a lot of efforts to try and find a resolution on this matter. I need to always caution that the reality is OPEC is only 30 percent producers, if you are taling about credibility we need to be asking the 70 percent producers where their credibility is”.
He added that “OPEC is making a lot of efforts in this and it is taking us even extra efforts to convince and get others on board, the likes of Russia, US and the rest. I think in terms of credibility, they (OPEC) have shown in last few meetings that they are focused on this.
“They have agreed to a freeze and do a cut and now they are trying to crunch the numbers”.
Agencies’ reports at the eve of the meeting indicated that Iran and Iraq are resisting pressure from Saudi Arabia to curtail oil production, making it hard for OPEC to reach a global output-limiting deal when it meets on Wednesday.
OPEC sources told Reuters a meeting of experts in Vienna on Monday failed to bridge differences between OPEC’s de facto leader, Saudi Arabia, and the group’s second- and third-largest producers over the mechanics of output cuts.
“The revival of Iran’s lost share in the oil market is the national will and demand of Iranian people,” Iranian news agency Shana quoted the country’s oil minister Bijan Zanganeh, who was due to arrive in Vienna later on Tuesday, as saying.
OPEC, which accounts for a third of global oil production, agreed in September to cap output at around 32.5-33.0 million barrels per day versus the current 33.64 million bpd to prop up oil prices, which have halved since mid-2014.
Iran has argued it wants to raise production to regain market share lost under Western sanctions, when its political arch-rival Saudi Arabia increased output.