* Saudi, Russia, Venezuela, Mexico fall short of agreement
* Oil drops more than $1 after 4-country shuttle diplomacy
* Crude prices down about 30 percent since June
* OPEC meets in Vienna on Thursday, many budgets underwater
(Adds Sechin comments)
By Alex Lawler and Rania El Gamal
VIENNA, Nov 25 Impromptu talks between Saudi
Arabia, fellow OPEC member Venezuela and oil powers Russia and
Mexico yielded no agreement on Tuesday on how to address a
growing oil glut, ending without any plan to cut output despite
a collapse in prices.
In a day of shuttle diplomacy before OPEC's output meeting
in Vienna on Thursday, energy officials from non-members Russia
and Mexico rushed to the Austrian capital to push OPEC kingpin
Saudi Arabia on the 30 percent price fall since June.
Saudi has kept the market guessing about its response to
crude's fall amid rapidly rising U.S. shale output, but
Tuesday's talks had led to speculation in some quarters that
Riyadh might back a coordinated cut involving non-OPEC members.
Venezuelan Foreign Minister Rafael Ramirez told reporters
after the talks that while all sides agreed current prices were
"not good" for producing countries, no coordinated output cuts
were arranged on Tuesday.
"We discussed the situation in the market, we shared our
points of view, we need to keep in contact and we agreed to meet
again in three months," Ramirez, who until recently was oil
minister and president of state oil company PDVSA, said.
Venezuela, a noted price hawk, would try for an output
agreement within OPEC on Thursday instead, he said.
Oil prices turned lower after the talks, with international
benchmark Brent falling more than $1 a barrel.
Igor Sechin, the head of Russian state oil company Rosneft
and a close ally of President Vladimir Putin, arrived
in Vienna on Tuesday amid hints that Moscow could cut output or
exports if the producer group did the same. Russian Energy
Minister Alexander Novak also attended the four-country meeting.
"I'd like to highlight that current oil prices are not
critical for us. We can postpone some capital-intensive
projects," Sechin told the meeting, according to a Rosneft
"What is going to happen of course is that it (low prices)
will have an impact on the global oil supply," he said,
apparently referring to a possible longer-term drop in output in
countries where oil production is more expensive, including some
projects in the United States.
Mexican Energy Minister Pedro Joaquin Coldwell left the
meeting before the other participants, without giving a
EYES TURN TO THURSDAY
Oil market watchers are divided on the outcome of OPEC's
Thursday meeting. Predictions range from a large production cut
to revive prices, to a small reduction, or none at all.
Current prices are far below what most OPEC members and
rival producers such as Russia need to balance their budgets,
but the group has struggled to adapt to growing supplies from
the U.S. shale boom.
Some analysts say an OPEC cut of as much as 1.5 million
barrels per day (bpd) is needed to support oil prices and avoid
increasing a supply glut in the first half of 2015.
Algerian Energy Minister Youcef Yousfi told the official APS
news agency on Tuesday that OPEC would seek a "consensual step"
to try to bring stability to the oil market, without giving
Diplomatic and market sources say Saudi officials told
briefings in recent months that the kingdom, with its large
currency reserves, was prepared to withstand oil prices as low
as $70-$80 per barrel for up to a year.
Saudi Oil Minister Ali al-Naimi said earlier this month that
Riyadh's desire for stable markets had not changed but gave no
clue about his potential response.
In Vienna on Monday and Tuesday, Naimi brushed off
reporters' questions about oil prices and surplus supplies.
"This is not the first time the market is
oversupplied," he said.
Naimi did not speak to reporters after Tuesday's meeting.
Russia's Kommersant newspaper cited sources on Monday as
saying Russia might suggest cutting its oil production by around
300,000 bpd from next year and that Moscow expected OPEC to
limit its output by another 1.4 million bpd.
Moscow's relations with OPEC were soured by the country's
pledge to cut output in tandem with the group in the early
2000s. Russia failed to follow through, and raised exports
Iranian news agency Shana said Putin and Iranian President
Hassan Rouhani spoke by telephone on Monday evening and agreed
"on necessary cooperation in favour of oil markets".
The agency did not say where it acquired the information. On
Monday, the Kremlin said the presidents discussed Iranian
nuclear talks and bilateral issues and made no mention of oil.
On Monday, Iran and six world powers agreed to yet another
extension in the talks aimed at resolving a 12-year-old dispute
over Tehran's nuclear programme until June 30, 2015.
That makes any quick revival in Iran's oil exports very
unlikely and removes a potential layer of complication to this
week's OPEC meeting.
(Additional reporting by Shadia Nasralla and Amena Bakr;
Writing by David Sheppard and Dmitry Zhdannikov; Editing by Dale