OPEC’s Biggest Challenge Is Within: Atkinson

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Dec. 4 (Bloomberg) –- Lloyd’s List Intelligence Head of Analysis Neil Atkinson discusses oil outputs for the two largest oil producers and what’s at stake at the OPEC meeting in Vienna. He speaks to Ryan Chilcote on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

The opec meeting.

Ryan chilcote is there.

Cliques we are joined by the head of analysis, neil atkinson.

Thanks for joining us.

Can we expect a squabble this time between the iranians and the saturdays capacity wise, the two largest producers within opec?

They're effectively on opposite sides of a proxy war in syria.

Cliques the political relationship has been terrible for some years and it shows no signs of improving.

We have the prospect of iran producing more oil and exporting more if there is sanctions relief.

Cliques this comes down to the question as to the pace of the talks between the u.s., european union, and iran.

There was an enormous amount of euphoria and it felt like a decision had been side posted for six months but people should be more cautious.

There are a lot of people with a lot at stake, not the least the u.s. administration which might not want to be painted as soft on iran in a midterm election year.

I think the prospect of a large volume of iranian oil returning to the market before midyear is more likely towards the end of 2014. the prospects are much more limited than what people think erie cliques of the images of u.s. producers of shale oil, they need a high price.

Would they be in obama's era saying be careful, you could undercut?

Cliques if i were one of those guys, i would not be very happy if i thought the oil price might crater.

It is not just producers of shale.

Many of the other opec numbers -- members need prices to stay high.

They have fast-growing populations and they need $90- one hundred dollars per barrel to balance their budgets not the least the saudi arabians.

Cliques what do you think of the idea that because of their relationship with iran, to punish them could, even if they saw a prospect of the price of oil falling decide not to cut?

They're really the only country that would or could.

Just to maintain market share and have the lower price pass on so they have less financial right and less to play with in terms of their rivalry in the region.

Cliques that is one scenario but i do not think in reality it is likely to be plausible because the idea of punishing iran where even if they come back into the market, the price for their revenue gain is not so much and tampers any economic recovery that may happen.

I don't think that will fly simply because the saudis themselves might not be able to withstand it and other producers within opec will not be happy at all with a significant lower price.

Venezuela is a significant example.

A lower oil price on a sustained basis is not good for producers.

It's not good for investment in the oil industry which is ultimately needed because demand is going up long-term.

Cliques would he think about the idea that 2014 is dangerous for opec?

Cliques it is.

For the first time, there is the possibility of a so-called perfect storm of rising production, not just for friends in the u.s. and other non-opec countries but within opec itself, iran, iraq likely to increase production finally after many years of teasing and we have nigeria shut off from the market and we have libya.

There is a potential perfect storm with all of this opec oil coming back to the market alongside oil from the non-opec countries alongside sluggish demand growth so we could see a significant downward pressure.

Cliques despite that, we expect opec to do nothing today?

Historically, it is a reactive organization.

They do not sit down and say, we have a problem in six months mama let's put forward a plan.

They just don't work like that.

Cliques i'm going to pass it back to you.

Cliques thank you, ryan.

Dime a mercedes-benz picking up

This text has been automatically generated. It may not be 100% accurate.


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