Opec's output freeze: What has changed since Doha?

IT'S possible that Opec (Organization of the Petroleum Exporting Countries) is crying wolf with hints of an output freeze next month in Algiers; but it's also possible that they are ramping up production to take the sting out of a freeze. This is a delicate balancing act that the Saudis need to play very carefully.

The official chatter is that the Opec meeting in Algeria from Sept 26 to 28 could conclude with an agreement to freeze production by the member nations, with even Russia joining forces in a freeze that may prevent further oil price erosion. But everyone's a bit gun-shy after the false hopes of the last round in Doha - even if a freeze at levels that existed then wouldn't have meant much either - and it's hard to blame them. The question is, how many times can the Saudis cry wolf without forever losing the ability to leverage this chatter to affect a rise in oil prices?

But let's rewind a bit to the nature of the recent chatter. The Saudi energy minister has indicated that Saudi Arabia, Opec's largest producer, is willing to proceed with a production freeze.