OPEC strategy unlikely to change as defiant Saudi Arabia forces global cuts

OPEC is bracing for a global oil glut that will last longer than many producers are expecting, a prospect that would force the Canadian industry to make deeper spending cuts and further delay projects. The Organization of Petroleum Exporting Countries meets next week to consider whether to cut production or stand pat with its current strategy – driven by Saudi Arabia and its Gulf allies – to maintain output and force high-cost producers out of the market with low prices. The strategy is showing signs of success as global oil companies have slashed their capital budgets by up to 40 per cent, and once-booming U.S. production appears to have levelled off and begun a slow decline. Saudi Arabia has signalled that it is prepared to weather low prices in order to reclaim its traditional share of global markets, where it was being squeezed by rising production in the United States, Canada and elsewhere. More…