The Organization of Petroleum Exporting Countries created a mess, according to FGE founder and chairman Fereidun Fesharaki.

The Organization of Petroleum Exporting Countries (OPEC) created a mess.

That’s according to FGE founder and chairman Fereidun Fesharaki, who made the statement in a television interview with Bloomberg on Wednesday.

“Donald Trump said that he is going to take it [Iran oil exports] from three million barrels per day to zero and OPEC countries they prepared for it, producing too much oil in September and October, and now we have a huge amount of inventories,” Fesharaki said in the interview.

“We need to cut 1.4 million barrels per day of oil for three months to be able to bring it in balance. So it is not something which can be fixed quickly, but OPEC created a mess, partly because of … [its] own actions, partly because being misled by Donald Trump, but now OPEC has to clean up the action with a little bit of help from the Russians,” he added.

Fesharaki highlighted three possible OPEC meeting scenarios in the Bloomberg interview.

“You can have a one million barrels per day cut which the markets will be disappointed [in] but would not allow a significant drop in the price, maybe a couple of dollars. You can have a no deal, which could then result in substantial drop in the price, or you can have 1.3, 1.4 million barrels per day deal and the markets will move up slightly,” Fesharaki stated in the interview.

“I don’t think they will move up rapidly because the inventories still have to be mopped up and people have to see the impact of the removal of the inventory before they’re able to make a judgement as to whether this time is working like it did last time,” he added.

Earlier this week, Fitch Solutions Macro Research’s most likely OPEC meeting scenario outlined that just over 800,000 barrels per day will be removed from the market.

“Our most likely scenario is for OPEC to increase target compliance with the 2016 deal to 200 percent and for OPEC+ to target a return to 100 percent compliance, removing 808,000 barrels per day off the market,” a report from the company, which was sent to Rigzone on Monday, stated.

“This action should also establish a floor for oil prices going forward and reassure markets of OPEC’s commitment to balance markets,” the report added.

Fitch Solutions Macro Research’s report also highlighted a second possible scenario of coordinated cuts above two million barrels per day and a third scenario of inaction from OPEC.

FGE describes itself on its website as a “preeminent global oil and gas consultancy which provides leading independent research, analysis, consultation and advisory services to a large and diverse client base across the world”.  Fitch Solutions Macro Research is a division within Fitch Group. Fitch group describes itself on its website as “a global leader in financial information services”.





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