Al-Naimi: OPEC ‘must combat US shale boom’
Al-Naimi: OPEC ‘must combat US shale boom’
Ali Al-Naimi won the argument at Thursday’s meeting, although ministers from members such as Venezuela, Iran and Algeria had wanted to cut production to reverse a rapid fall in oil prices.
A Gulf delegate told Reuters that Al-Naimi had reassured members that the oil price would recover as demand will ultimately pick up. But he insisted that if OPEC cut output it would lose market share.
“Reaching a final decision took a lot of time convincing the others,” said another delegate.
Some members were not prepared to offer big cuts themselves, and, choosing not to clash with Saudi Arabia and their allies, ultimately agreeing to Al-Naimi’s suggestion.
“Al-Naimi spoke about market share rivalry with the US. And those who wanted a cut understood that there was no option to achieve it because Saudi Arabia wants a market share battle,” a source, who was briefed by a non-Gulf OPEC minister after Thursday’s meeting, told Reuters.
Oil hit a fresh four-year low below $72 per barrel on Friday.
A boom in shale oil production and weaker growth in China and Europe have sent prices down by over a third since June.
Secretary General Abdullah Al-Badri effectively confirmed OPEC was entering a battle for market share.
Asked on Thursday if the organization had a answer to rising US production, he said: “We answered. We keep the same production. There is an answer here.”
OPEC agreed to maintain — a ‘rollover’ in OPEC jargon — its ceiling of 30 million barrels per day, at least 1 million above its own estimate of demand for its oil in the first half of next year.
“We are together,” said Venezuelan Foreign Minister Rafael Ramirez when asked whether there was a price war within OPEC.
“OPEC is always fighting with the US because the US has declared it is always against OPEC... Shale oil is a disaster as a method of production, the fracking. But also it is too expensive. And there we are going to see what will happen with production,” he said.
Analysts, quoted by Reuters, said the decision not to cut output in the face of drastically falling prices was a strategic shift for OPEC.
Porsche first German carmaker to abandon diesel engines
- The company would concentrate on its core strength, ‘powerful petrol, hybrid and, from 2019, purely electric vehicles’
- But Porsche promised it would keep servicing diesel models on the road now
BERLIN: Sports car maker Porsche said Sunday it would become the first German auto giant to abandon the diesel engine, reacting to parent company Volkswagen’s emissions cheating scandal and resulting urban driving bans.
“There won’t be any Porsche diesels in the future,” CEO Oliver Blume told the newspaper Bild am Sonntag.
Instead, the company would concentrate on what he called its core strength, “powerful petrol, hybrid and, from 2019, purely electric vehicles.”
The Porsche chief conceded the step was a result of the three-year-old “dieselgate” scandal at auto giant Volkswagen, the group to which the luxury sports car brand belongs.
VW in 2015 admitted to US regulators to having installed so-called “defeat devices” in 11 million cars worldwide to dupe emissions tests.
It has so far paid out more than €27 billion in fines, vehicle buybacks, recalls and legal costs and remains mired in legal woes at home and abroad.
Diesel car sales have dropped sharply as several German cities have banned them to bring down air pollution — a trend that Chancellor Angela Merkel was due to discuss with car company chiefs in Berlin later Sunday.
Stuttgart-based Porsche in February stopped taking orders for diesel models, which it had sold for nearly a decade.
Blume said Porsche had “never developed and produced diesel engines,” having used Audi motors, yet the image of the brand had suffered.
“The diesel crisis has caused us a lot of trouble,” he said, months after Germany’s Federal Transport Authority ordered the recall of nearly 60,000 Porsche SUVs in Europe.
Blume promised that the company would keep servicing diesel models on the road now.
According to the paper, Porsche also faces claims of having manipulated engines to produce a more powerful sound with a technique that was deactivated during testing.
Blume acknowledged that German regulators had found irregularities in the 8-cylinder Cayenne EU5, affecting some 13,500 units.
Merkel, Transport Minister Andreas Scheuer and heads of German auto companies were due to meet in Berlin later Sunday to discuss steps to avoid more city driving bans.
The German government hopes to see one million fully electric and hybrid vehicles on the road by 2022, up from fewer than 100,000 at the start of this year.