Russia and Saudi Arabia “struck a private deal” in Algeria to increase production in order to suppress oil prices. Just a few days after the Algiers meeting, Trump blamed OPEC for high oil prices at the UN General Assembly in New York.
Brent surged to $85 per barrel in recent days, evidence that oil traders are not convinced about OPEC’s strategy. Saudi oil minister Al-Falih said that production would be “slightly higher” in November compared to October levels.
However, Khalid al-Falih confirmed the increase in supply, telling reporters that Saudi output currently stands at 10.7 million barrels per day (mb/d), right around the country’s all-time record high.
Russia added 150,000 bpd in September, pushing output up to a new post-Soviet record high at about 11.35 mb/d. Those are serious numbers, and should not be taken with a grain of salt.
It remains to be seen if Trump can convince the Saudis to take a more aggressive line, although it should be noted that Saudi Arabia’s decision to increase production by 300,000 bpd from August levels is not trivial.
Qatar’s Minister of Energy and Industry Mohammed Bin Saleh Al-Sada defended the current OPEC strategy on Wednesday. “OPEC is not trying to manipulate the price, it’s trying to bring the market to balance,” he told CNBC.
Russia Insider / ABC Flash Point Oil News 2018.