The Organization of Petroleum Exporting Countries will meet at the end of November to make a plan on whether to cut production, all in an effort to raise oil prices around the globe. But such a move could be offset by continued production in the United States, where unconventional oil and gas is plentiful.
At the same time, a country like Saudi Arabia has reasoned in the past that it can afford to keep up production in an effort to drive smaller producers out of business. Thus, energy managers who oversee such as company fleets and corporate travel may not feel much of a pinch in the coming months.
The group meets on Nov. 30 and has pledged to reach a deal on cutting output to try to erode a two-year-old global surplus.
According to a post in 4-traders.com, the secretary-general of OPEC — Mohammed Barkindo — warned in September that its members should bond together to cut production and that a failure to do so would damage an already fragile oil economy.
“The fact that Barkindo feels a need to make such public statements suggests the membership remains divided on at least the details of an agreement,” says Tim Evans of CitiFutures, as eported by 4-traders.com.