This after an informal meeting held in Vienna over the weekend by OPEC members which included a number of Non-OPEC nations such as Russia failed to yield the desired agreements that are needed to be in place ahead of OPEC's final bi-annual meeting of 2016 set to be held on the 30th November 2016.
Having failed to reach an accord in April this year, OPEC endless divisions on how to implement production cuts that'll be able to embed sustenance into the existing trend have largely gone unnoticed until now where we beginning to see oil traders becoming skeptical over the chances of a deal being struck anytime soon.
Furthermore the recovery in oil prices has seen the viability of alternative producers increase tremendously indicating that the effort needed to see real price gains is clearly stacked up against the meager endeavours of OPEC which is why the decision by Non-OPEC nations to join the discussion over possible agreements was a huge catalyst for OPEC to solve its own problems and not fear it's own attempts to manage the price mechanism would dissolve it's market share to competitors.Saudi Oct. Oil Output: 10.55mmbpd, vs 10.65mmbpd in Sept: JBC— zerohedge (@zerohedge) October 31, 2016
But the impasse in OPEC that seemingly keeps regurgitating itself is providing reason for Non-OPEC nations to become disinterested in it's plans and thus a continuation of an oversupplied market which ultimately leads to a stalemate in price levels. The situation isn't helped by the state of the global economy that's battling to find traction in a difficult environment of negative interest rates coupled with deflation.
Here's the thing; Oil producers need to accept that demand isn't going to stimulate growth for a very long time and the best path to follow is finding efficiency rather than relying on demand to fund the outlay of mega expansions.
Hard to accept, difficult to swallow but straight to the truth if the world cannot consume the current supply of oil daily why is there a need to bring more to the surface?
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