“OPEC +” discusses production policy… No recommendations from Wednesday’s meeting

“OPEC +” discusses production policy… No recommendations from Wednesday’s meeting
“OPEC +” discusses production policy… No recommendations from Wednesday’s meeting
OPEC and its allies will decide on Thursday whether to pump more oil into the market or curb supplies amid a decline in oil prices, US moves to pump more of its crude reserves and concerns about the mutated Omicron strain of the Corona virus.
OPEC and its allies are at odds with the United States, which has asked the group to increase its production to support the global economy, but the producing countries say they do not want to impede a weak recovery of the energy industry with a new oversupply.
“In these turbulent times, it is essential that we and non-OPEC countries … remain cautious in our approach and take the lead in accordance with the requirements of market conditions,” Diamantino Pedro Azevedo, energy minister of Angola, which chairs the current OPEC session, said in an opening speech to an OPEC meeting. ».
Three sources in OPEC said that the meeting of the organization’s ministers ended, on Wednesday, without any recommendations on production policy.
The OPEC + alliance, which includes Russia and other producing countries, is likely to make a decision on production policy, on Thursday.
Russia and Saudi Arabia, the two largest producers in OPEC +, said before this week’s meetings that there was no need for the group to take a knee-jerk reaction to adjust production policy. Iraq said that it is expected that OPEC + will extend the current production policy in the short term.

slight effect

Since August, the group has been adding 400,000 barrels per day to global supplies while gradually abandoning record cuts agreed in 2020, when demand waned due to Corona.
“In general, it appears that Omicron’s impact has so far been limited to jet fuel, particularly in Africa and Europe,” OPEC+ said in a report before the meeting.
Many countries have banned travelers from southern African countries, and some European countries have imposed new restrictions to confront the Corona virus.
“Demand for transportation fuels within Europe may also be affected,” the report added, noting that more data on the danger of Omicron will be available within two weeks.
Goldman Sachs said that the drop in oil prices in the past days was excessive, as the market takes into account in estimating prices the drop in demand by seven million barrels per day. Rystad Energy said another wave of closures could lead to a three million bpd drop in demand in the first quarter.
Even before Omicron’s emergence, the group was already studying the effects of the US and other countries’ announcement last week to use emergency crude reserves to cool energy prices.
OPEC + expected a surplus of three million barrels per day in the first quarter of 2022 after pumping reserves, up from previous expectations that stopped at 2.3 million barrels per day.
But the report said that the effect of withdrawing from the reserves will be slight because some countries have made it voluntary and for an indefinite period.
US Deputy Energy Secretary David Turk told Reuters on Wednesday that the administration of President Joe Biden may adjust the timing of the withdrawal if prices fall significantly.
OPEC + is gradually working to end the record supply cuts of 10 million barrels per day, equivalent to about ten percent of global supplies. There are still cuts of about 3.8 million barrels per day in effect.
But OPEC again reduced its oil production for the month of November from the planned level, with some producing countries facing difficulties in increasing their production.


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