Oil prices continue to track lower in the wake of late reports yesterday. This confirms that OPEC experts did not reach an output deal at their working meeting in Russia before tomorrow’s formal summit meet in Vienna.
Reports in Asia suggest the Saudi’s have offered Iran a freeze at +3.7MBD, below the +3.97MBD requested by Tehran as it recovers from western sanctions.
The financial market is worried about the outcome of the OPEC meeting in Vienna this week. Most of financial analysts expect lack of compliance as usual by OPEC members even if an output cut/freeze cut can be reached.
Algeria and Venezuela seek to reach a deal to output cut, but Saudi Arabia has recently suggested that a rate cut might not be needed because demand should recover next year. Khalid Al-Falih, the Kingdom's oil minister suggested that with oil demand expected to "recover in 2017, then prices will stabilize, and this will happen without an intervention from OPEC". Algeria and Venezuela continue to seek support from Russia. The energy ministers of both countries will meet in Algiers and then travel to Moscow on Monday.