It is now confirmed that the meeting of Arab OPEC members in Cairo on November 29th will be expanded into a general OPEC meeting to discuss production levels. As the average price for OPEC produced oil is now somewhere in the $40s, most OPEC members are, or soon will be, running into major financial problems that were unforeseen 6 months ago.
Nearly every member is talking production cuts beyond the 2 million b/d already agreed on, but most would like somebody else to do the cutting while they continue to produce as much as they can. Nigeria and Venezuela are already producing well below quota and have plenty of room to fudge new cuts. Ecuador has asked to be exempted from another cut on the grounds that as a small producer, it needs the money.
OPEC is making a major effort to induce non-OPEC oil exporters to join the cartel in cutting exports so that the non-members do not enjoy the benefits of higher prices while avoiding the pain of lower sales. Noting that non-OPEC producers are currently pumping about 50 million b/d, considerably more than OPEC’s 32 million b/d, the cartel has asked at least Russia, Mexico, and Norway to join in further cuts. Thus far, only Moscow has expressed some interest.
Some members are said to be pushing for a further 1.5 million b/d cut bringing the total of the three cuts to 3.5 million b/d. Others, fearing an overreaction that could damage the world economy, are talking about a modest 500,000 b/d cut while waiting for the early cuts to take full effect. Meanwhile, many remain skeptical that OPEC will actually cut production and are expecting further price declines.