Saudis, Russia Haggle on Oil as Trump Tells OPEC to Keep Pumping

OPEC and its allies continued to haggle over the size of potential crude-production cuts in Vienna on Wednesday as U.S. President Donald Trump urged the group to keep the taps open and prices down.

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With just a day to go before a critical OPEC summit, most producers made clear they agree on the need for a cut in oil production, without explaining how they’ll turn that desire into a reality.

Preparatory talks between Saudi Arabia and Russia Wednesday yielded no breakthrough, putting pressure on both to push for a deal at a wider meeting later in the day.

The stakes are high after prices suffered their largest monthly drop since the financial crisis in November,

while Trump resumed his public pressure on the cartel, saying in a tweet that the “world does not want to see, or need, higher oil prices!”

“With exquisite timing, President Trump just crashed the pivotal preparatory meeting where ministers are trying to hash out a compromise,” said Rapidan Energy Group LLC President Bob McNally.

Oil prices were little changed by the president’s intervention, rising 27 cents to $62.35 a barrel in London.

“There is little disagreement among OPEC members over the need to cut, but there is not yet consensus over how much,” said Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd. “Communicating a large cut, if one can be agreed upon, will still be fraught with challenges given complicated U.S.-Saudi relations.”

In an interview Tuesday, Saudi Energy Minister Khalid Al-Falih said it was “premature” to suggest the OPEC+ group — which includes allies Russia and Kazakhstan — would agree to curtail output. That’s less bullish than his call a month ago for 1 million barrels a day of cuts. Crude gave up much of its gains on Tuesday following his comments, and fell on Wednesday.

Russian Energy Minister Alexander Novak said his discussion with Al-Falih on Wednesday morning was “good,” but added there’d be more talks ahead for OPEC+ members.

Al-Falih subsequently met Gulf producers including Kuwait, Iraq, the United Arab Emirates and Oman as he worked to reach a consensus.

Oman Optimism

“I think we will get a deal,” said Mohammed Al Rumhy, oil minister of non-OPEC member Oman, adding that Venezuela, Nigeria, Libya and Iran need to be exempted from making any cuts.

Iran is currently subject to U.S. sanctions and as such won’t participate in any curbs, the country’s OPEC governor Hossein Kazempour Ardebili said this week. U.S. special representative for Iran Brian Hook met with Al-Falih in Vienna on Wednesday, according to a person familiar with the matter.

The last time the OPEC+ group agreed to curtail output, in late 2016, it settled on a combined 1.8 million-barrel-a-day reduction.

In preparatory meetings ahead of this week’s summit, delegates have said a cut of as much as 1.3 million barrels a day next year is needed as demand growth slows and U.S. shale production surges.

The opportunity for countries to put their cards on the table comes later Wednesday at the Joint Ministerial Monitoring Committee, the panel that oversees the 2016 deal.

Both Al-Falih and Novak will attend that meeting, a day ahead of the full OPEC gathering on Dec 6.

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