OPEC meets on December 1, followed by an OPEC+ meeting the next day (Getty)
The Organization of the Petroleum Producing Countries is heading "OPEC" And its allies from the major producers in the alliance known as “OPEC +” to stick to its current policy in production during its next meetingIn response to the decision of a number of crude-importing countries to withdraw from the strategic oil reserve.
Three sources told "Reuters" that OPEC + is not discussing stopping oil production increases despite the decision of the United States, Japan, India and other countries to release the emergency oil stocks.
The United States said on Tuesday that it would release 50 million barrels of oil from strategic reserves in coordination with similar releases from China, India, South Korea, Japan and Britain, in an attempt to calm prices after OPEC + ignored calls to pump more.
The group is adding 400,000 barrels per day of supply each month, backtracking from record production cuts last year when pandemic restrictions hit demand.
Louise Dixon, an analyst at Rystad Energy, said, “The bold move from oil importers opened the door wide for OPEC + to adjust its supply policy by a reduction in its next (meeting) on December 2, 2021.”
“The coordinated release of the SPR could end up with a near-term political victory for the parties involved, but we don’t think it will have a lasting impact on crude fundamentals,” Fitch analyst Jake Libby said in a note.
Analysts said that US Energy Information Administration data released on Wednesday showed that gasoline and distillate stocks fell more than expected even as crude stocks increased, indicating the market needs more oil.
“The bigger picture is that production demand remains solid, adding pressure on a tight market,” Kieran Tomkins, an economist at Capital Economics, said in a note.
OPEC + believes that the world will soon face a new glut in supply, despite the rise in oil prices to their highest levels since 2014 above $85 a barrel.
And “Bloomberg” agency reported, citing an unidentified document, that the advisory body of the Organization of the Petroleum Exporting Countries (OPEC) expects that the release of oil stocks by the United States and other crude consuming countries will lead to an increase in an expected global surplus of oil at the beginning of next year.
Bloomberg reported that the Council of the OPEC Economic Committee expects the surplus in global crude oil markets to grow by 1.1 million barrels per day to 2.3 million barrels per day in January and to 3.7 million barrels per day in February if consuming countries fulfill their promises to withdraw from reserves during these two months.
Bloomberg said that some delegations from OPEC and its partners have indicated that they may cancel a production increase scheduled in January if stocks released by the United States and other countries flood the market.
The Wall Street Journal said on Wednesday that Saudi Arabia and Russia are considering such a step, while the UAE and Kuwait are not convinced that a pause in productivity increases is necessary.
On Wednesday, the head of the International Energy Agency urged OPEC to take “necessary” measures to help bring oil prices down to “reasonable levels”.
Fateh said: “I hope that in the next meeting or meetings … the necessary steps will be taken in order to reassure global oil markets and help reduce prices to reasonable levels.”
Oil prices fell today, Thursday, as US West Texas Intermediate crude futures fell nine cents, or 0.1 percent, to $ 78.30 a barrel, continuing losses after falling 11 cents on Wednesday.
Brent crude futures fell five cents to $82.20 a barrel, after losing six cents yesterday.
For their part, a number of oil-producing countries reiterated today and yesterday their commitment to the production policy agreed upon in OPEC +, as the Kuwaiti Oil Ministry confirmed full commitment to the OPEC + alliance agreement and denied the existence of any prior position regarding the next meeting of the alliance.
The UAE Ministry of Energy also said today, Thursday, that the UAE is fully committed to the OPEC + agreement and does not have a “prior position” regarding the next meeting of the bloc, which will be held on the second of December.
The ministry added, in a statement, that “the UAE is fully committed to the agreement to declare cooperation in the “OPEC Plus” group, and there is no prior position regarding the next meeting,” stressing that “any decisions will be taken collectively by the OPEC + group at its next meeting.”
And Iraqi Oil Minister Ihsan Abdul-Jabbar said yesterday, Wednesday, that the OPEC + alliance is monitoring the balance between supply and demand in oil markets to make decisions during its meeting in December.
He stressed that the OPEC + alliance aims to achieve balance in the oil markets through gradual production increases.
(Reuters, The New Arab)
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