OPEC Deal Coming Soon, Says Venezuela’s Maduro

Image of oil derricksOil prices were on the rise this morning, with news coming out of Venezuela from president Nicolas Maduro claiming that OPEC members have had recent “positive discussions” about a pact to stabilize petroleum prices.

The agreement has been rumored for months, but so far nothing has materialized. From Bloomberg:

“We are close to an agreement between OPEC and non-OPEC countries to stabilize the market,” state oil company Petroleos de Venezuela SA wrote on Twitter, citing Maduro. A “definitive answer” for market stability could come this month, he said, according to PDVSA.

Venezuela, along with the rest of OPEC and Russian representatives will meet later this month to continue the dialogue:

Ministers from all 14 member nations of OPEC, as well as the energy minister of Russia plan to have informal discussions about the oil market in Algiers on Sept. 27 on the sidelines of the International Energy Forum.

News of the meeting has fanned speculation that producers may agree on an output cap to shore up prices that are languishing below $50 a barrel nearly two years into the largest market crash in a generation. If the ministers reach a consensus in Algeria, OPEC may call a special meeting, Secretary General Mohammed Barkindo said on Sunday, according to Algeria’s official news agency.

The result of a pact between OPEC nations would likely be an agreement to cut production considerably. The oil market has been slammed by a massive global inventory glut this year, with none of the major producers willing to give in and lower their output.

China has responded by buying up a massive amount of oil at low prices, betting that it will save money in the long run once prices spike again.

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The United States Oil Fund LP ETF (NYSE:USO) rose $0.09 (+0.90%) to $10.09 per share in premarket trading Monday. The largest ETF tied to the price of WTI crude oil has fallen 9.09% year-to-date.

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