OPEC to hold informal talks at conference in September

The president of the oil cartel said on Monday informal talks would be held at an energy conference in September in response to plummeting oil prices.

The Organisation of the Petroleum Exporting Countries (OPEC) has largely controlled the price of crude oil for the past 40 years but has been troubled by the renewed dip in crude prices since its last meeting in Vienna in June.

Officials from the 12-member group, largely from the Middle East, will meet at the international energy forum conference in Algeria.

OPEC president Mohammed al-Sada, said: “OPEC continues to monitor developments closely, and is in constant deliberations with all member states on ways and means to help restore stability and order to the oil market.”

Sada said demand for oil is expected to be strong in the second half of the year while petroleum supply would weaken.

Sada added: “Expectation of higher crude oil demand in the third and fourth quarters of 2016, coupled with decrease in availability, is leading the analysts to conclude that the current bear market is only temporary and oil price would increase during later part of 2016.

“These are more of an outcome resulting from weaker refinery margins, inventory overhang — particularly of product stocks, timing of Brexit and its impact on the financial futures markets, including that of crude oil.”

At the moment, oil prices are lower than those most OPEC nations need to balance their national budgets. Brent fell to about $40 a barrel last week.

Following news of OPEC's informal talks, Brent crude rose 2.4% to 45.36 per barrel and West Texas Intermediate increased 2.7% to $42.98 per barrel at 1729 BST.

OPEC members may push for talks in setting new production limits in order to raise prices as Iran regains market share after the partial lifting of international sanctions.

In Doha, in April, OPEC and non-OPEC members met to discuss limiting production but nothing came of the talks. Saudi Arabia, who is experiencing economic problems due to the low price of oil, backed out after Iran refused to set production limits until it had reached production levels they had before sanctions were imposed.