OPEC Nations to Discuss Oversupply of Oil

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The world’s oil oversupply could continue to rise, causing a drop in fuel and energy prices. That possibility will be under discussion at OPEC negotiations on Thursday.

The Organization of the Petroleum Exporting Countries will decide whether to continue with production cuts agreed to three years ago.

These negotiations take place as tensions increasingly drive OPEC member-nations in different directions.

Saudi Aramco, Saudi Arabia’s national oil and gas company, is expected to enter the stock market Friday.

OPEC Nations to Discuss Oversupply of Oil
OPEC Nations to Discuss Oversupply of Oil

The move puts Saudi Arabia in a difficult position as it considers oil production levels and current oil prices.

Some nations, such as Iraq, have been ignoring OPEC’s production limits agreement and are producing more oil.

Bhushan Bahree is an executive director of international oil at the research company IHS Markit. If people are already not honoring the current agreement, he asked, why make more cuts?

He said, “I think the Saudi position is they’re willing to cut more if needed, but they want better compliance.”

Currently, OPEC nations have agreed to cut production by 1.2 million barrels per day through March 2020. Most experts expect OPEC nations to extend those production cuts until at least summer.

Jacques Rousseau is with Clearview Energy Partners. He said, “If they just keep the existing situation, then you get this massive oversupply.” He believes OPEC nations will cut production by an additional 400,000 barrels per day to keep supply and demand in balance during the first half of next year.

Rousseau said Kuwait, Saudi Arabia and the United Arab Emirates are more likely to make the cuts. But large cuts may be difficult with some OPEC members following their own plans.

I’m Jonathan Evans.

The Associated Press reported this story. John Russell adapted it for VOA Learning English. Caty Weaver was the editor.

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Words in This Story

comply – v. to do what you have been asked or ordered to do

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