President Rafael Correa says he’s given up trying to convince OPEC to reduce oil production. “With only a small cut in production, the price would rise significantly,” Correa told reporters on Thursday, referring primarily to Saudi Arabia, which controls the OPEC agenda. “Why don’t they do it? I’m tired of insisting.”
The price of a barrel of oil dropped below $27 on Wednesday before rebounding to about $29 Thursday. The re-entry of another large OPEC producer, Iran, into the market has added more downward pressure on prices, Correa conceded. “I’m happy the sanctions on Iran have been lifted but this means that in the short term more oil will enter the market, pushing prices down.”
Venezuela has requested an emergency OPEC meeting to discuss production levels but Correa doubts it will happen. He said Saudi Arabia and other larger producers have “their own agenda” and are not open to changing it.
Earlier in the week, Correa said he agreed with the consensus of experts that oil prices could continue to decline for a few weeks before stabilizing. “Almost everyone agrees that prices will go up during the second half of the year but it’s possible the rise could come sooner,” he said. Ecuador’s 2016 national budget is based on a price of $35 a barrel.
“By the end of 2016, most estimates are that we will climb back to $55 to $60 a barrel,” Correa says.