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OPEC chatroom dead as Qatar crisis hurts Gulf cooperation

Oil dips after US crude hits near two-year high on pipeline shutdown


Published: November 24, 2017 00:48:08


OPEC's most powerful internal alliance, bringing together the oil producer group's Gulf members, is disintegrating fast.

As a six-month-old spat between Saudi Arabia and Qatar deepens, the organisation's Gulf ministers will have to scrap their tradition of meeting behind closed doors to agree policy before OPEC holds its twice-yearly talks, OPEC sources say.

"We used to have a WhatsApp group for all ministers and delegates from the Gulf. It used to be a very busy chatroom. Now it's dead," said a senior source in the Organisation of the Petroleum Exporting Countries, reports Reuters.

Four other sources said there had been no official contact on oil policy between the Gulf Arab nations, in a grouping known as the Gulf Cooperation Council (GCC).

The GCC includes OPEC members Saudi Arabia, the United Arab Emirates, Kuwait and Qatar and non-OPEC Oman and Bahrain. OPEC meets on Nov. 30 in Vienna to decide whether to extend global output cuts beyond March.

OPEC kingpin Saudi Arabia and the UAE cut ties with Doha in June, saying Qatar backed terrorism and was cozying up to rival Iran. Qatar rejected the accusation.

"The ministers can't meet," another OPEC source said. "They may relay the message through the Kuwaiti or the Omani oil ministers, but Saudi and the UAE cannot meet publicly with the Qataris."

Kuwait and Oman have refrained from taking sides in the dispute, over which Kuwait's Emir Sheikh Sabah has led regional mediation.

To be sure, OPEC has survived worse crises and operated under even greater strain, including the Iran-Iraq war in the 1980s, Iraq's invasion of Kuwait in 1990 and proxy wars fought by Saudi Arabia and Iran over the past decade.

Another report from S'pore adds: Oil prices eased on Thursday, with US crude falling away from two-year highs reached the day before, but the shutdown of the Keystone pipeline and a drawdown in fuel inventories continued to bolster markets despite worries over rising output.

US West Texas Intermediate (WTI) crude futures were at $57.89 a barrel at 0749 GMT, down 13 cents, or 0.2 per cent, from their last settlement, but still close to 2015-highs of $58.15 a barrel reached on Wednesday.

Brent crude futures LCOc1 were at $63.14 per barrel, 18 cents, or 0.3 per cent, below their last close.

WTI has been buoyed by the shutdown of the 590,000 barrel-per-day (bpd) Keystone pipeline, one of the largest crude pipelines from Canada to the United States, as well as by another drawdown in commercial fuel inventories that came despite record US oil production.

"Lower supplies into the US from the north and robust exports from the south are likely to support a further reduction in US inventories," said Ole Hansen, head of commodity strategy at Saxo Bank.

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