Oil Production Freeze Will Have Limited Impact on Prices

Dow Jones] Even if major OPEC producers agree to a production freeze at their informal gathering in late September, the move would have muted impact on the actual global supply and price moves would be limited, says Thomas Pugh, commodities economist at Capital Economics. “None of the countries agreeing to freeze output, except for Saudi Arabia, have much spare capacity so could not increase output even if they wanted to…OPEC production is at near record-levels,” he writes, noting that given prices have risen in the past few months, producers have little incentive to sign up to a freeze deal. Moreover, the market has been moving toward a balance since April when producers last met and failed to reach a consensus.