OPEC cut deal fails, as Russia backs down

The Organisation for Petroleum Exporting Countries, OPEC may as well say goodbye to achieving cut in production output by its members and non-OPEC countries as the meeting held ahead of today’s general meeting failed to produce any deal.
Delegates said OPEC failed to bridge divisions after 10 hours of talks.
OPEC officials failed to bridge their differences on an agreement to cut production and push up oil prices.
Russia also said it will not attend crucial talks today.
OPEC officials agreed to refer the matter to ministers for further consideration today.
The proposed deal would trim production by 1.2 million barrels a day from October levels, though it remains unclear whether the idea has the support needed for approval, according to delegates.
Benchmark Brent crude fell as much as 1.2 percent to $47.68 a barrel in London, after touching $48.81 on Monday.
Inside the meeting, countries fought to the very last barrel. Iran suggested a deal whereby it freezes production at 3.975 million barrels a day, or about 200,000 barrels a day above its current output. Saudi Arabia countered with a proposal for Iran to cap output at 3.707 million barrels a day, roughly its current level.
Algeria, which is acting as a go-between in
the talks, offered an alternative that would see Iran freeze at 3.795 million barrels a day.
OPEC is also asking other big producers including Russia to reduce output by as much as 600,000 barrels a day.
The Kremlin so far has resisted requests that it join the cut, offering instead to freeze production at current levels.
Energy Minister, Alexander Novak, said Tuesday that he had no plans to visit Vienna on Wednesday, but that Russia is ready to talk with OPEC once the group reaches an internal consensus.
Russia’s refusal to cut supply led to the cancellation of planned discussion on Monday with non-OPEC suppliers.
Last week, Saudi Arabia pulled out of the meeting, arguing that OPEC needs to sort out its internal divisions before engaging with other producers.
“Saudi Arabia and Iran are all playing very strong negotiation tactics,” said Abhishek Deshpande, chief energy analyst at Natixis SA. “The problem for Saudi Arabia is that this isn’t the 1980s and 1990s, when it could use its clout and expect others to follow. Today members like Iran and Iraq are equally strong and their agenda is to ensure they get a large market share.”
Both Iraq and Iran have resisted cutting their own production, but need an OPEC deal to benefit from any increase in oil prices.