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  • The Organization of the Petroleum Exporting Countries (OPEC) logo is pictured at its headquarters in Vienna June 10, 2014.

    The Organization of the Petroleum Exporting Countries (OPEC) logo is pictured at its headquarters in Vienna June 10, 2014. | Photo: Reuters

Many countries seek an oil output cutback to stabilize the price of oil, while others continue to rejected the idea. 

Member nations of the Organization of Petroleum Exporting Countries (OPEC) along with non-members oil exporters held a rare extraordinary meeting this Wednesday, committing to continue working towards the stabilization of the world economy following the dramatic drop of crude prices in 2015.

The meeting, which took place at the request of Venezuela and other countries seeking a cut in oil production, included large non-OPEC nations including Russia, Brazil, Mexico and Colombia.

The 12-nation oil cartel and the non-members are expected discussions to center on supply cuts, as OPEC's production has exceeded its target output of 30 million barrels a day in recent months, causing the price of crude to plummet to six-year low. Advocates for an oil production cut say they want to stabilize the market, which saw a dramatic drop in the price per barrel of crude from US$98 in 2013 to the current US$40.

But, the Wall Street Journal said few analysts expect any meaningful departure from the current oil cartel's policy to pump oil to defend its share in the market.

“The special meeting this Wednesday ... hasn't generated the usual fanfare – mostly because no one expects oil producer to do anything that will alleviate the pressure on oil prices,” Market Watch commented.

Venezuela and other countries, such as Iran and Russia, have their hopes set on this issue being discussed as they want the price to be more in the range of US$88.

Venezuelan President Nicolas Maduro last month proposed the summit between major world oil producers from OPEC and non-OPEC members to discuss production cuts.

OPEC currently accounts for approximately 45 percent of world oil production.

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Many other experts believe the United States has coerced its allies in the Middle East – especially OPEC's largest producer of oil, Saudi Arabia – to put a downward pressure on the price of oil to directly affect countries that are not aligned with their policies, such as Russia, Venezuela, Iran, Bolivia and Brazil, while replenishing their own reserves at rock bottom prices.

Source: Reuters

So, the drop in oil prices has benefitted the United States and many European countries, while negatively affecting the economies of many commodity exporting countries.

Oil producers that depend heavily on crude revenues have been pressuring Saudi Arabia, but the U.S. staunch ally has been unwilling to make significant cutbacks in its daily production.

Tyler Richey, co-editor of The 7:00’s Report, said the idea of OPEC cutting its output “will remain just that, an idea, until Saudi Arabia expresses any interest in defending prices rather than market share. At the end of the day, what Saudi Arabia says goes.”

A former Venezuelan oil minister, Rafael Ramirez, told Reuters that the country will propose progressive production cuts to control prices, with a “first floor” of US$70 a barrel and later a target of US$100 a barrel.

On Tuesday, President Maduro said he was confident that the Vienna meeting would shed positive results.

Maduro also said the average price of oil should be around US$88 “in order to maintain the level of investment worldwide.”

To this effect, Maduro said he would present “evidence in Vienna that the price of oil should be maintained at 88 dollars a barrel.”

Reuters reported that Mexico has agreed to attend, but won't cut oil production.

Phil Flynn, senior market analyst at Price Futures Group, was a bit more optimistic, saying that although he also believes no agreement will be reached on this occasion, “it may be the starting point for talk about reducing output in the future.”

Platts recently made public a survey showing that OPEC output in September edged down from a month earlier to 31.2 million barrels a day, following some Saudi cutbacks.

According to the Telegraph, Qatar's oil minister, Mohammed Al Sada, told reporters in Doha that, “Different countries are studying this proposal (for cutbacks in output) and there will be a response from OPEC, and from outside of OPEC."

WATCH: Venezuela Fights to Stabilize the Price of Oil

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