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OPEC targeting $55/b oil, meeting non-OPEC exporters in Istanbul

Saudi Energy Minister Khalid al-Falih talks to journalists before a meeting of OPEC oil ministers in Vienna, Austria, June 2, 2016.   REUTERS/Leonhard Foeger/File Photo - RTX2ISJV

Saudi Energy Minister Khalid al-Falih talks to journalists before a meeting of OPEC oil ministers in Vienna, Austria, June 2, 2016. REUTERS/Leonhard Foeger/File Photo – RTX2ISJV

Boutarfa had urged his fellow ministers to agree to a 1 million b/d cut below OPEC current production levels

OPEC is aiming for an oil price of $55/b, Algerian energy minister Noureddine Boutarfa said Thursday, adding that the producer group could set its output ceiling lower than the tentative deal reached last week, if needed, according to Platts.

OPEC ministers agreed in Algiers last Wednesday to freeze their crude production between 32.5 million to 33 million b/d, which would be a cut of between 240,000 to 740,000 b/d from current production levels, according to OPEC estimates.

Final details of the plan, including individual country allocations, will be decided at the next formal meeting on Nov. 30.

“During the next meeting in Vienna at the end of November we will study the market,” Boutarfa told local television station Ennahar. “If 700,000 barrels are not enough, it will be possible to raise the level of reduction.” “The first goal of OPEC is a barrel at $55,” he added.

He said OPEC would meet informally with key non-OPEC producers on the sidelines of the World Energy Congress in Istanbul next week.

In particular, Russia has indicated it is keen to cooperate  on a production freeze.

Russian energy minister Alexander Novak is scheduled to speak on a panel with Saudi energy minister Khalid al-Falih and OPEC Secretary General Mohammed Barkindo at the World Energy Congress.

Boutarfa said that the Algiers meeting proved that they are unified in the mission to stabilize oil markets.

The producer group had been operating without a production target since Dec. 4, 2015, when ministers scrapped the notional 30 million b/d ceiling that had been in place since 2012, amid disagreements over output policy going forward.

Leading up to the Algiers meeting, Boutarfa had urged his fellow ministers to agree to a 1 million b/d cut below OPEC’s current production levels.

“We are now united and speaks with one voice, [so] everything becomes easy,” Boutarfa said. “If we must still reduce by 1%, we will do it. The first step has been taken. We entered a path that allows us to consolidate prices.”

OPEC

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