OPEC is heading for tougher-than-expected policy talks on Thursday amid concern that its efforts to rebalance the oil market might overshoot by creating a global deficit and spurring a further price rally.
“It will not be an easy meeting and we always look at various scenarios,” United Arab Emirates Energy Minister Suhail Al-Mazroui said on Tuesday in Dubai before leaving for the gathering of the OPEC in Vienna.
OPEC, Russia and nine other producers are cutting oil output by about 1.8 million barrels per day until March 2018, and on Thursday will discuss extending the deal.
The market had largely expected OPEC to prolong cuts until the end of 2018 but doubts have emerged in the last few days.
OPEC’s leader Saudi Arabia has signaled that it wants oil to trade at about 60 dollars per barrel as the kingdom prepares to list shares in its national oil champion Aramco and is still fighting a large fiscal deficit.
The Russian government also wants high oil prices ahead of a presidential election in March 2018.
Officials in Moscow have voiced worries about pricier oil boosting the rouble, which could undermine the competitiveness of Russia’s economy.
As oil rallied above 60 dollars per barrel, U.S. producers aggressively hedged their future production, raising fears of another spike in shale output in the U.S., which is not participating in the global production curbs.
Goldman Sachs, one of the most active banks in commodity trading and…