The Oil Bloc
Your first choice for oil industry news

- Advertisement -

OPEC+ weighs further oil cuts plans


OPEC and allies including Russia are leaning towards postponement of a planned January increase to oil production by at least three months to support prices as the COVID-19 pandemic continues its second wave.

Reuters reports that the OPEC+ group of producers was due to raise output by 2 million barrels per day (bpd) in January – about 2% of global consumption – as part of a steady easing of record supply cuts implemented this year.

But with demand for fuel weakening, OPEC+ has been considering delaying the increase or even making further cuts.

An option gaining support among OPEC+ nations to keep the existing curbs of 7.7 million bpd for a further three to six months, OPEC+ sources said, rather than tapering the cut to 5.7 million bpd in January.

One OPEC+ source said, “A three-month extension is highly likely,”.

Two OPEC+ committees are meeting virtually this week. The Joint Technical Committee (JTC) held its meeting on Monday and the Joint Ministerial Monitoring Committee, which can recommend policy steps to OPEC+, meets on Tuesday.

OPEC+ will have a full meeting on Nov. 30 and Dec. 1 to decide output policy for next year.

Algeria, currently the holder of OPEC’s rotating presidency, has backed an extension of existing cuts and top exporter Saudi Arabia has said the OPEC+ deal could be “tweaked”.

An OPEC+ source said Monday’s JTC meeting also discussed figures showing OPEC+ compliance with pledged curbs was 96% in October – less than previously thought – after inclusion of compensatory cuts for past excess production by some countries.

The figures suggested little month-on-month progress in ensuring countries that overproduced in previous months made extra cuts now. Russia’s cumulative overproduction was seen at 531,000 bpd and Iraq’s at 610,000 bpd, the source said.

Oil nonetheless was trading above $44 a barrel on Monday, finding support from hopes of a COVID-19 vaccine and for further action by OPEC+.

Source Reuters
You might also like

Leave A Reply

Your email address will not be published.

Translate »
Share via
Copy link
Powered by Social Snap