Former OPEC Chief Is 'Optimistic' Members Will Reach An Agreement Next Week To Curb Supply

OPEC nations and major oil producing countries met in Doha, Qatar back in April to reach an agreement that would place a limit on oil output levels. As was expected, the meeting passed with no agreement finalized and the organization will meet again next week to discuss a similar agreement.

This time around, optimism for a deal to be reached is higher since most OPEC countries are already producing oil near full capacity while some are even producing oil at historical all time high levels.

Speaking to Bloomberg, OPEC's former President Chakib Khelil said it should be pretty straightforward for OPEC members to promise not to increase their output even further. He added that OPEC members are "feeling pain" because of low oil prices and the mentality across the organization is "why add to the pain when they can avoid it just by saying something."

"Most producers have already reached their maximum level and their largest share of the market," Khelil said. "There's not much cost."

However, Khelil cautioned that an agreement to freeze supply levels most certainly doesn't imply a reduction in supply, rather a promise not to increase supply even further.

"They won't go for a cut," the oil minister concluded. "They're going to continue with the strategy to defend their share of the market, which will be re-balanced next year."