OPEC nations met in Qatar this weekend to discuss the possibility of a freeze in oil production, as a way to boost prices — but the oil producers couldn’t come to an agreement.
Oil prices hit a 12-year low in January, The Associated Press notes, falling beneath $30 a barrel. The prospect of OPEC talks in Doha, Qatar, helped boost prices to around $40, but an analyst tells the AP they may fall again — perhaps sharply — after the talks collapsed.
The proposal would have capped production at January levels, instead of allowing it to rise. The goal was to prompt crude prices to rise.
But the meeting broke up without any agreement to limit production, NPR’s Jim Zarroli tells our Newscast unit.
“The session ended after Saudi Arabia insisted that Iran be part of the production freeze,” Jim says. “Iran was only recently allowed back into the oil market after the easing of sanctions and has refused to agree to a freeze.”
OPEC will try again. Officials say they believe a deal can be struck by June.
NPR’s Marilyn Geewax explained the situation over the weekend:
“OPEC, the Organization of the Petroleum Exporting Countries, is made up of 12 of the world’s largest oil producers, including Saudi Arabia, Venezuela, Qatar, Iran and Iraq.
“The United States is not part of the cartel, which was formed about a half-century ago to push up or hold down oil supplies. OPEC’s goal is to keep supplies at levels that ensure stable prices and healthy profits for members.
“But production from U.S. shale formations has driven up oil supplies so quickly that prices have fallen globally, down to 12-year lows.
“Despite this oil price plunge, OPEC countries keep drilling.”