Algeria sees oil market in ‘critical’ shape ahead of OPEC talks

Bloomberg

The oil market is in “much more critical” shape than when OPEC last met and its members must seek ways to stabilize crude prices, possibly by freezing or cutting output, Algeria’s energy minister said ahead of talks among the group’s members this week in Algiers.
Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries, is willing to do its utmost to ensure the discussions succeed and is open to capping or reducing its production, the Algerian minister, Noureddine Boutarfa, said Sunday in an interview in Algiers. Fellow OPEC member Algeria wants the group to cut its collective output by 1 million barrels a day, he said.
“The situation since the last meeting in June has worsened, the situation is much more critical,” Boutarfa said. “So it’s important to see what measures can be adopted in the short term and very short term to find a solution to this situation that isn’t helping any OPEC country.”
Crude prices, which have dropped more than half from their 2014 peak amid a global supply glut, rebounded last month on speculation that OPEC and Russia might revive a pact to limit production. Prices have since cooled, and benchmark Brent crude futures fell 3.7 percent to $45.89 a barrel on Friday. A reasonable price for crude Algeria would be a range of $50 to $60 a barrel, Boutarfa said.
Saudi Arabia and Iran, whose rivalry blocked a deal with other major producers in April, did not reach an agreement after two days of preparatory talks in Vienna, including a Saudi offer to pump less crude if Iran caps output at current levels, according to two people familiar with the negotiations.
Saudi Arabia doesn’t anticipate any formal decision on supply in Algiers, a delegate familiar with its policy said.