Ministers of the OPEC have been unable to reach consensus on a quota cut for more than a year now [Xinhua]
Oil prices could fall back to $40 a barrel and threatening the fiscal balance of a number of emerging economies if OPEC fails to reach a quota cut agreement.
“The lack of progress on implementing production quotas and the growing discord between OPEC producers suggests a declining probability of reaching a deal on November 30,” Goldman Sachs investment firm analysts said earlier this week.
Their statement caps off a week of bad news which has seen Iraq refuse to cut its production quota, mimicking post-sanctions Iran’s persistence that it needs to increase – not decrease – its output to refill cash-strapped coffers.
On Wednesday, oil prices closed down even further. International benchmark Brent crude fell 1.50 per cent to $46.64 while US benchmark West Texas intermediate fell 1.43 to $45.24.
Oil prices had increased in mid-October after Russian President Vladimir Putin had said he was ready to work with the Saudis to reduce output and boost prices, and after a number of oil producing officials said that prices would likely balance out to around $60 a barrel in 2017.
The BRICS Post with inputs from Agencies
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