OPEC meets this week in what many are calling its most important summit in a decade, with a falling oil price and signs world demand may be on the slide.
Many members have come to Vienna to push for production cuts to bolster the price, including Russia. Moscow held separate talks with the Saudis on co-ordinated action, but failed to agree.
In any case OPEC may not be master of its fate.
“A lot of the dynamics are moving past OPEC production targets. We’ve got the very significant deceleration in China, which was proven by the cut of rates in China. We’ve got the deceleration that is taking place in Japan as well as Europe so there are a lot of global demand factors which may be more important than the price OPEC does or doesn’t set,” said Russell Investments’ Stephen Wood.
Analysts say the Saudis will not move to defend the price until it nears 60 US dollars a barrel, which it may hit next spring on current market trends. OPEC says three countries would in any case be exempt from cuts: Libya, Iraq, and Iran.
It is good news for world markets, but bad news for big companies or oil-dominated economies.