OPEC kicked off a two-day ministerial summit on Monday that should allow it to decide on quotas for curbing black gold production in a market still squeezed by the coronavirus pandemic.
The meeting, which began at around 1:30 pm GMT (2:30 pm in Paris), will be held via video conference, just like the ministers’ previous monthly updates this year. The thirteen members of the Organization of Petroleum Exporting Countries (OPEC) will be joined by their ten OPEC + allies, mostly Russia, on Tuesday. The common goal of the alliance of producing countries is to drive a crude market devastated by the Covid-19 pandemic that is slowly recovering from the precipices where prices had fallen at the end of the month. April.
The health crisis “continues to have unprecedented negative repercussions for the global economy and, consequently, for the energy markets,” warned Algerian Energy Minister Abdelmadjid Attar, who is the rotating cartel chair, in an introductory speech broadcast live on the OPEC website. .
To stop the price decline, the producer group is using its main weapon by forcing itself to drastically cut black gold production to adapt it to molten demand. This is a painful earnings effort, even though these cuts have helped bring prices back on track.
An expected reprieve
Under the current deal decided in April, the current market withdrawal will be reduced from 7.7 million barrels per day to 5.8 million from January 2021, but most observers expect a three, or even six, month delay, while the second wave of Covid-19 was not foreseen at the time. “We need to be aware today that in 2020 market conditions are likely to continue in the first quarter of 2021,” said Mr. Attar in his speech.
But the recent surge in crude oil prices – on the order of 25% since the beginning of the month – driven by announcements from pharmaceutical companies such as AstraZeneca, Pfizer / BioNTech or Moderna of an upcoming vaccine against Covid-19, brings a a dose of uncertainty reminiscent of previous summits.
The first of 2020, which took place at the organization’s headquarters in Austria, had even turned into a fiasco. At the beginning of March, Russia and Saudi Arabia had left Vienna back to back and within a month engaged in a price war.
However, the impact of massive vaccination campaigns, a real lifeline to revive economic activity, travel and thus consumption of black gold, may only be felt in months, while the cartel’s action aims at least the first, at most the second quarter of 2021. At the start of the day in red, prices of the two crude oil benchmarks, North Sea Brent and US WTI, limited their losses shortly after the start of the meeting and fell in. closer to their closing price on Friday.
OPEC kicked off a two-day ministerial summit on Monday, which should allow it to decide on quotas for reducing black gold production in a market still squeezed by the coronavirus pandemic.
The meeting, which began at around 1:30 pm GMT (2:30 pm in Paris), will be held via video conference, just like the ministers’ previous monthly updates this year. The thirteen …