By Grant Smith, Salma El Wardany and Dina Khrennikova On 27-11-2020
(Bloomberg) – Saudi Arabia and Russia convened the OPEC + alliance on Saturday for last-minute talks, just before deciding whether to slow down January’s production boom.
A clear majority of OPEC + viewers expect the group to maintain their supply constraints at current levels for a few more months due to ongoing uncertainty about the strength of demand. However, the decision is by no means certain amid public complaints from Iraq and Nigeria and personal disagreements with the United Arab Emirates.
“The technical foundation has been laid for OPEC + to postpone a winding down of production cuts,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA. “Now the political foundation must be laid.”
The two leading members of the Organization of Petroleum Exporting Countries and its allies, Russian Deputy Prime Minister Alexander Novak and Saudi Energy Minister Abdulaziz bin Salman, requested an informal video conference with their counterparts from the Joint Ministerial Monitoring Committee, which also included Algeria. and Kazakhstan. Iraq, Nigeria and the UAE, according to a letter from Bloomberg.
The unscheduled meeting comes just two days before a full OPEC ministerial meeting on November 30, before allies join the talks on December 1. The JMMC did not meet online until November 17, but that ended without any kind of recommendation about delaying the January. increase in supply.
The 23-country network known as OPEC + has implemented massive production cuts during the depths of the pandemic to offset a historic collapse in fuel demand. The alliance planned to lighten some of the curbs in early 2021 in anticipation of a global economic recovery, reviving about 1.9 million barrels per day of discontinued production, after a similar resumption in the summer.
But with a recent resurgence of the virus triggering new lockdowns and darkening the demand outlook for early next year, OPEC + has indicated it could delay the next hike instead.
On Thursday, Algerian Energy Minister Abdelmajid Attar – who holds OPEC’s rotating presidency this year – told Bloomberg News that the group must remain cautious as oil prices rise above $ 45 a barrel in New York this week could be vulnerable. may turn out to be.
A separate meeting of a committee of OPEC technical experts reviewed data suggesting the risk of a new oil surplus early next year should the cartel and its allies decide to increase production.