Oil prices bounce back on eve of OPEC meeting

Saudi Arabia and its Gulf partners are at odds with others pushing for a cut in output in a bid to perk up prices

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Oil prices bounced back in Asia Thursday but trading was cautious on signs the OPEC cartel is divided ahead of a Friday meeting on whether to maintain or slash its high output levels.

A Saudi oil source said on Thursday that media reports of a Saudi OPEC output cut proposal were “baseless.”

“It is baseless,” the source, who asked not to be named, said without elaborating.

Focus is now on the Organization of the Petroleum Exporting Countries meeting in Vienna Friday. Analysts say the 12 members appear to be divided, with Saudi Arabia and its Gulf partners at odds with others pushing for a cut in output in a bid to perk up prices.

Bloomberg News said Venezuela and Ecuador - which have been badly hit by the plunge in prices - would seek production cuts during the meeting.

IHS Energy said Saudi, Kuwait, Qatar and the United Arab Emirates will have great influence on the tone of the meeting as they account for more than half of OPEC’s 31.5 million barrels per day output.

“Without the Gulf group, there can be no effective OPEC agreement,” IHS Energy said in a report ahead of Friday’s meeting.

OPEC has been pumping above its collective target of 30 million barrels per day as its influential members led by Saudi Arabia try to maintain their share of a highly competitive market.

Prices have plunged by more than half from peaks of above $100 a barrel in mid-2014 largely because of the oversupply.

(With AFP and Reuters)

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