U.S. legal threat urges change at OPEC, decides not to mention price

October 17, 2018:

OPEC has urged its members not to mention oil prices when discussing policy in a break from the past, as the oil producing group seeks to avoid the risk of U.S. legal action for manipulating the market as per the sources.

Proposed U.S. legislation known as “NOPEC”, which could open the group up to anti-trust lawsuits.

It has long lain the dormant with previous American Presidents signaling that they would veto any move to make it law.

But U.S. President Donald Trump has been a vocal critic of the Organisation of the Petroleum Exporting Countries.

He has blamed it for high oil prices & urged it to increase output to relieve pressure on a market hanging around four-year highs.

It had made OPEC and its unofficial leader, Saudi Arabia, nervous about what it might mean for NOPEC, or No Oil Producing and Exporting Cartels Act.

The decision to refrain from discussing a preferred oil price level which is a way the group can guide market expectations — underlines how Trump’s aggressive stance on the oil market is unsettling OPEC and testing ties between allies Riyadh and Washington.

In July, senior OPEC officials attended a workshop in Vienna with international law firm White & Case to discuss the NOPEC bill, and the lawyers advised avoiding public discussion of oil prices and rather talk about the stability of the oil market, two sources familiar with the matter said.

OPEC officials were also advised to explore diplomatic lobbying channels to try and prevent the NOPEC bill from becoming law, sources reported.

Source: Reuters