Gulf oil producers are expected to press the case for not yet cutting OPEC output, despite calls from some members of the group to bolster sagging prices by removing surplus crude from the market. As Ciara Lee reports that's welcome news for those benefitting from low prices.
It's one of the most closely watched meetings of oil producers in years. But few expect OPEC's 12 members, led by Saudi Arabia, to agree to a cut in output. Removing surplus crude from the market would help sagging prices. And Brent oil fell again to a fresh four-year low ahead of the meeting CMC Markets' Michael Hewson says even if there is a cut, the oil price is unlikely to swing in near future. (SOUNDBITE) (English) CMC MARKETS' MARKET COMMENTATOR, MICHAEL HEWSON, SAYING: "The U.S. shale revolution has completely revolutionised the supply and demand dynamics of how oil actually circulates around the world. So essentially the U.S. is no longer importing anywhere near as much oil as it used to. Russia needs the money, its economy is flat on its back. Are they going to cut production? I don't think so. So even if Opec announced a cut, I think all that will happen is Russia will continue to produce at the same level it has been, and ultimately it won't change." Oil prices have sunk 30 percent in the past six months, partly down to the U.S. shale boom, but also because of slower economic growth in China and Europe. Reuters Energy Community Editor Christopher Johnson says that's helped the global economy. (SOUNDBITE) (English) REUTERS ENERGY COMMUNITY EDITOR CHRISTOPHER JOHNSON, SAYING: "Essentially, lower oil prices mean a transfer of wealth from oil producers to oil consumers and to the extent that consumers benefit from lower inflation, stronger economic growth and perhaps more investment and further jobs that's good for everybody." OPEC accounts for a third of global oil output - cutting it would lose further market share to North American shale producers. Not cutting could lead to a price war. But that's something the Saudis and other Gulf producers can withstand thanks to their large foreign-exchange reserves.