OPEC seen unlikely to cut production
Member countries due to meet on Friday to discuss output
The Organisation of Petroleum Exporting Countries (OPEC) is seen unlikely to cut crude oil production ahead of its Friday meeting in Vienna.
The cartel currently produces 31.3mn barrels of oil per day (bopd) exceeding its previously announced quota of 30mn bopd.
In the first quarter, OPEC's kingpin Saudi Arabia increased its output from 9.8mn to 10.3mn bopd pumping oil at near record high levels.
The Kingdom's move to maintain high crude oil production means that the Saudis are determined to no longer cut output to support prices. Instead, their focus would be on maintaining its position on the market, Swiss private bank Lombard Odier has said in a recent statement.
"[Saudi Arabia] would rather see prices collapse and secure its market share than cut output without cooperation from non-OPEC producers," the bank's statement read.
Despite their dependency on oil revenue, Saudi Arabia and its fellow Gulf Arab states "are under no financial strain, and therefore in no hurry to cut production any time soon", it added.
"Gulf countries are indeed highly dependent on oil resources, but not all to the same extent. Moreover, most of them can bear revenue losses in the medium term, given their large surpluses, low debt levels, and extremely high financial reserves in Sovereign Wealth Funds (SWF)."
The experts at Lombard Odier also said that crude oil output will remain ample as "any political decision to cut output remains remote at this stage."
They added that US shale producers are expected to cut shale output for economic reasons but will revive production on higher oil prices.