OPEC leader Saudi Arabia has signalled it's unlikely to push for a major change in oil output at the producer group's meeting this week. As David Pollard reports, their comments come as Russia refuses to cooperate in any production cut.
The summit's disappointed some, even before it starts. A round of pre-meeting diplomacy between Saudi Arabia and Venezuela and non-OPEC Russia and Mexico failed to produce an output cut, despite an ongoing collapse in prices. Though there was common ground on one thing, according to Venezuelan foreign minister, Rafael Ramirez. (SOUNDBITE) (English) VENEZUELA'S FOREIGN MINISTER, RAFAEL RAMIREZ, SAYING: "Everybody's agreed that the price is not good. (REPORTER ASKING "The price is not good?") It is not good.'' This year's OPEC get-together in Vienna is hotly awaited. But the view from onlookers on whether OPEC will reduce production is a resounding 'not quite sure'. James Bevan of CCLA is one who does see a cut coming - though not perhaps now. SOUNDBITE (English) JAMES BEVAN, CIO, CCLA INVESTMENT MANAGEMENT, SAYING: ''I am not convinced we will see any immediate action coming out of the OPEC meeting but I do believe that Saudi will have to reduce production levels. I think we may get back down to Saudi producing no more than eight and half million barrels per day.'' The intentions of the Saudis - OPEC's biggest producer - and its oil minister are key. With output currently at 30 million barrels a day, OPEC expects supply to exceed demand by more than one million barrels a day next year. Prices - pressured by vast US shale reserves and low demand - are already down nearly a third since mid-year. Prompting some to think back to 2008 - the collapse of Lehman's and the world economic crisis. Neil Atkinson is head of analysis at Lloyds List Intelligence. SOUNDBITE (English) NEIL ATKINSON, HEAD OF ANALYSIS, LLOYDS LIST INTELLIGENCE, SAYING: ''By late December the price had done down to $36 a barrel. Now, I'm not saying that's going to happen again, but if could happen back in 2008, there's no reason why it can't happen again in 2014, given that we do have a rapid build up in supply and very weak demand growth.'' But from previous experience, the Saudis fear losing market share if they cut production. Relations with Russia went sour in the early Noughties when Moscow pledged to cut - but then raised production instead. And Russian oil official Igor Sechin is keeping OPEC guessing now, by doubling back on hints it's ready to reduce output this time. Instead, suggesting it's ready for a price war that could damage producers with higher costs. Like the US and its shale industry. In the meantime, analysts are split. Some see no cut, some see a cut from half to one and half million barrels a day. While others are guessing the summit could easily run over into a second day as ministers hammer out that very issue.