Key decision makers across the Organisation of Petroleum Exporting Country (OPEC) are meeting today to consolidate the 23-nation network’s consideration on oil output.
Today’s full OPEC ministerial meeting comes ahead of tomorrow’s meeting between OPEC and its allies, a 23-nation network otherwise known as OPEC+.
Saudi Arabia and Russia had at the weekend summoned the OPEC+ alliance for last-minute talks, preparatory to this week’s meetings.
A clear majority of OPEC+ watchers expect the group to maintain their supply curbs at current levels for a few months longer due to lingering uncertainty about the strength of demand. However, the decision is by no means certain amid public complaints from Iraq and Nigeria, and private discord with the United Arab Emirates
A statement read: “The technical groundwork has been laid down for OPEC+ to postpone a tapering of its output cuts,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA. Now the political groundwork needs to be put in place.”
The two leading members of the OPEC and its allies, Russian Deputy Prime Minister Alexander Novak and Saudi Energy Minister Abdulaziz bin Salman, had at the weekend requested an informal video conference with their counterparts from the Joint Ministerial Monitoring Committee (JMMC), which includes Algeria, Kazakhstan, Iraq, Nigeria and the UAE, according to a letter seen by Bloomberg.
The 23-nation network had made vast production cuts during the depths of the pandemic to offset a historic collapse in fuel demand. The alliance had planned to ease some of the curbs at the start of 2021 in anticipation of a global economic recovery, reviving about 1.9 million barrels a day of halted output, having managed a similar resumption over the summer.
But with a recent resurgence of the virus triggering new lockdowns, and darkening the demand outlook for early next year, OPEC+ has signaled it may instead defer the next increase.
Algerian Energy Minister Abdelmajid Attar — who this year holds OPEC’s rotating presidency — told Bloomberg News last Thursday that the group must remain cautious because the surge in oil prices to above $45 a barrel in New York this week could prove fragile.
A separate meeting of a committee of OPEC’s technical experts considered data that pointed to the risk of a new oil surplus early next year if the cartel and its allies decide to go ahead with the production increase.