A powerful consortium of oil producers that includes Saudi Arabia and Russia will try to goose lackluster oil prices this week with promises to extend previous output cuts for several months and perhaps into next year.
At a semiannual gathering in Vienna on Thursday, Saudi-led OPEC and other oil-producing nations are expected to strike a deal that would continue or possibly even deepen output cuts that stabilized the unruly oil market. These nations began reducing production in January.
Higher crude prices would fatten profits for oil companies and energy services firms that make up the core of Houston’s economy, which is already poised for faster growth in 2017 after struggling through a two-year oil bust. So far, though, OPEC’s cuts haven’t curbed the global oil glut nearly as much as anticipated, as $50-a-barrel oil fueled a U.S. drilling recovery that threatens to counteract the cartel’s efforts to lift prices.
“It’s a battle over barrels,” said Robert McNally, president of the Rapidan Group, an energy consultancy. “All we know is the market rebalancing keeps getting delayed.”