OPEC meets, tries to salvage deal limiting oil output
Cartel had previously agreed to cap output to support oil prices
OPEC was trying on Monday to rescue a deal to limit oil output as tensions grew among the producer group and non-OPEC member Russia, with top exporter Saudi Arabia saying markets would rebalance even without an agreement.
A gathering of OPEC experts failed to reach a compromise on how exactly the Organization of the Petroleum Exporting Countries should reduce production when it meets on Nov. 30, according to several sources briefed on the matter.
After more than nine hours of talks, Iran and Iraq continued to insist on higher output numbers, said the sources, who were not allowed to speak publicly about the matter.
Meanwhile, the Algerian and Venezuelan oil ministers were travelling to Moscow on Monday in a final attempt to persuade Russia to take part in cuts instead of merely freezing output, which has reached new highs in the past year.
Doubts follow September agreement
In September, OPEC, which accounts for a third of global oil production, agreed to cap output at around 32.5-33.0 million barrels per day versus the current 33.64 million barrels per day to prop up oil prices, which have more than halved since mid-2014.
The meeting on Nov. 30 was expected to rubber-stamp that deal, with Russia and some other non-OPEC producers such as Azerbaijan and Kazakhstan also contributing.
But doubts emerged in recent weeks as OPEC's No. 2 and 3 producers, Iraq and Iran, expressed reservations about the mechanics of output reductions and Saudi Arabia voiced concern about Russia's willingness to cut.
On Friday, OPEC cancelled an experts meeting with non-OPEC producers scheduled for Nov. 28 after Saudi Arabia said the organization needed to sort out its differences first.
Over the weekend, Saudi Energy Minister Khalid al-Falih said oil markets would rebalance even without an output-limiting pact. He had previously said Riyadh was keen for a deal.
Russia, which like Saudi Arabia depends heavily on oil revenues, said on Monday it remained keen to coordinate action with OPEC but refrained from stating whether it was prepared to cut output.
The Kremlin said President Vladimir Putin spoke to Iranian President Hassan Rouhani and both leaders highlighted "the importance of OPEC's efforts to cap production as a key measure to stabilize global oil markets".
Oil prices fluctuate on uncertainty
Doubts about OPEC's ability to deliver promised cuts sent Brent crude down two per cent initially on Monday to less than $47 a barrel.
Prices later recovered to trade up 2.5 percent after Iraq's oil minister said he remained optimistic that a deal could be clinched on Wednesday.
Some analysts including Morgan Stanley and Macquarie have said oil prices will correct sharply if OPEC fails to reach a deal, potentially going as low as $35 per barrel.
OPEC ministers started arriving in Vienna on Sunday for the group's regular twice-yearly talks but Saudi Arabia's Falih was not expected to land before Tuesday evening, leaving little time for traditional pre-meeting discussions with peers.
Iranian semi-official news agency MEHR published an editorial on Sunday accusing Saudi Arabia of declaring a new "war on oil prices" and reneging on its promises to limit output.
The tone contrasted with Iranian news agencies' more upbeat coverage of OPEC's informal meeting in September in Algeria, when the initial deal was reached.
As prospects for a deal on Wednesday faded, some veteran OPEC players urged the group to do its utmost to achieve the first output-limiting deal since 2008 in order to stay relevant.
"OPEC needs to wake up instead of playing a game of who will cry first," said former Qatari energy minister and OPEC president Abdullah al-Attiyah.