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Oil producing countries will fare better with a deal

The crucial meeting in Vienna holds high hopes for a clear plan to prop up oil market

It's not just a matter of who will blink first and agree to a cut in oil productions. Despite the assurances and proposals in Algeria in September, the Organisation of the Petroleum Exporting (Opec) is yet to find a clear way to stabilise the oil market. The crucial meeting in Vienna holds high hopes for a clear plan to prop up oil market and see the prices above $50-$52 by the end of the year. Even before the meeting began, Saudi Energy Minister Khalid Al Falih sounded a lot more optimistic about a possible deal. He has said that the group in-principle has agreed to a cut over one million barrels a day, 1.4 million bpd to be precise, but Opec is looking for support from non-Opec members such as Russia to cut production levels by at least 600,000 barrels a day. "All the bumps we have seen in terms of micro-economic, global, surprise productions coming from certain quarters, and all the fundamentals are on their own pointing at the right direction," the minister said of a reviving oil market in coming days. However, all this was said to the media and journalists before he entered the meeting. The stance hardens when the countries get behind closed doors and debate, each unwilling to lose ground and get the maximum leverage. At least that's what we have seen in the last few years. Even though the chances of a pragmatic solution are up in the air, the markets played along with the optimistic spiel of the ministers at Vienna and Brent crude rallied as much as 7.5 per cent to $49.85 a barrel on Wednesday. This is the biggest gain since February this year, and the first plan to reduce supply since 2008. OPEC holds more than 40 per cent stake in the oil industry and the world's top 10 oil producing countries make up for 60 per cent of the market. As per research, petroleum extraction in the Arctic region has the highest breakeven price of $75 per barrel. On the other hand, Middle Eastern countries have the lowest price at $27 per barrel and US shale oil producers have a breakeven price of $65 per barrel.