Oil Prices Drop With Iraq’s Non-Cooperation To OPEC For Production Cut

Oil prices dropped Monday in early Asian trade following Iraq getting excluded itself from the production cut plan of Organization of the Petroleum Exporting Countries (OPEC).

The current output in Iraq is at 4.77 million barrels a day and it has warned not to scale back.

As Iraq is the second largest OPEC producer after Saudi Arabia, it would not be possible for a collective production cut without the country.

SCI International energy analyst Gao Jian said, “There is a risk that Iraq’s refusal could trigger a domino effect that other producers would ask to be exempt from the cuts too.”

According to ANZ Research, the latest comments from Iraq would keep oil prices under pressure for the session.

The next meeting of OPEC members are scheduled to be held on November 30 and individual production quotas could be discussed so that the group’s production can be kept under 33 million barrels a day.

In past the members have not complied to the quotas and hence the upcoming meeting could not be helpful, points out several market observers.

Meanwhile, the final September oil data of China re-scheduled to be released this week would be on watch card of investors.

The political developments in Venezuela are also to be monitored by oil analysts.

Venezuela is an oil-dependent economy.