OPEC meeting ‘toughest test yet’ for Saudi-Russia alliance

Omar Marques | Anadolu Agency | Getty Images

Secretary General of OPEC, Mohammed Barkindo (R), Russia Energy Minister Alexander Novak (L), Saudi Arabia’s Minister of Energy, Industry and Mineral Resources, Khalid Al-Falih (C) hold a joint press conference during the 173rd Ordinary Meeting of the Organisation of Petroleum Exporting Countries (OPEC) in Vienna, Austria on November 30, 2017.

The energy alliance between OPEC kingpin Saudi Arabia and non-OPEC heavyweight Russia faces its “toughest test yet” next week, analysts have told CNBC, ahead of a much-anticipated meeting between the influential oil cartel and its allies.

OPEC and non-OPEC members will meet in Vienna, Austria, on Thursday, with the aim of reaching an accord over possible output cuts in order to prop up tumbling oil prices.

Crude futures have fallen more than 25 percent since climbing to a four-year peak in early October, amid intensifying oversupply concerns and worries over slowing economic growth. This collapse in prices has ratcheted up the pressure on OPEC and its allied partners to orchestrate a fresh round of production cuts at its final meeting of the calendar year.

“As things stand, the Russian and Saudis are still far from being on the same page over the finer details of looming output restrictions,” Stephen Brennock, oil analyst at PVM Oil Associates, said in a research note published Friday.

It leaves the de facto OPEC leader and allied non-OPEC producer facing its “toughest test yet” to find a compromise, Brennock added.

International benchmark Brent crude was trading at $58.68 a barrel at around 12 p.m. London time (7 a.m ET), down around 1.4 percent, while West Texas Intermediate (WTI) stood at $50.52, more than 1.7 percent lower.