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Oil in Global Economy Series: Kuwait keeps deeper cuts on table for OPEC meeting

With just a day to go to the much anticipated OPEC meeting, comments are flying all over the place and this time around it’s the oil minister of Kuwait. In an exclusive interview with Kuwait’s news agency, the Kuwaiti oil minister Essam al-Marzouq kept all options on the table including deeper cuts: “All options are on the table and could be discussed. However, any agreement should be satisfactory for all parties. And if the necessity arises, we could increase the output cut. But it is premature to talk about that now”.

Kuwait was one of the first countries to endorse a proposal backed by Russia and Saudi Arabia to extend the current production deal by nine months. His comments, however, also provides reasons to be concern with: “All indications so far, show that most countries, if not all, back the extension of this agreement”

We at FxWirePro discussed the various possibilities of the outcome of the tomorrow’s meetings and we identified two potential upside cases better than the current base assumption of nine months’ extension; one where deeper cuts are introduced along with extensions and the other where more countries join the initiative. The Kuwaiti oil minister indicated that Egypt, Norway, Turkmenistan, and Indonesia could join the initiative.

Oil price remains upbeat ahead of the meeting. WTI is currently trading at $51.4 per barrel and Brent at $2.8 per barrel premium to WTI.

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