2023-11-30T16:16:14+00:00
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/ The OPEC+ countries met in the Austrian capital, Vienna, on Thursday, to discuss defining the bloc’s strategy for the year 2024, in addition to ways to control the recent decline in oil prices.
Agence France-Presse asked whether the coalition countries will move towards further production cuts or will they just maintain their strategy? This is a question that worries the markets.
Prices rose this morning with investors preferring the first option. The Wall Street Journal reported the possibility of adopting an additional voluntary reduction in production of up to one million barrels per day.
The thirteen ministers of the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, began their meeting at about eleven o’clock in the morning Vienna time (ten o’clock GMT), at the organization’s headquarters via video. They are joined by their ten partners, led by Russia, according to a source close to OPEC+.
Negotiations have intensified in recent days, while Saudi Arabia, which bears the bulk of the cuts, has tried to convince African countries to share the burden.
An informed source told Agence France-Presse, requesting anonymity, that “the dispute continues,” adding that if a compromise is not reached in the coming hours, this issue could be postponed until 2024.
Among the countries that reject it are Angola and Nigeria, which want to “increase their production shares” in order to enhance oil revenues, which are a source of foreign currency, according to what another source indicated.
But the two sources downplayed the impact of this dispute on the alliance united around Riyadh and Moscow.
These two countries did not accept the results of the last meeting last June, which witnessed a reduction in their production targets. Conversely, the UAE was allowed to continue boosting its crude oil production due to its large reserve capacity.
According to DNB analysts, it seems unlikely that an agreement will be reached at the level of the OPEC+ group. Instead, analysts expect to maintain the current quotas, which is “the easiest path that can be followed.”
The possibility of adopting different cuts in different countries was also mentioned, with “the possibility that Saudi Arabia will intensify its efforts,” according to one of the sources.
Since the end of 2022, OPEC+ has kept about 5 million barrels per day underground, exploiting the scarcity of supplies to try to raise prices undermined by economic uncertainty against the backdrop of high interest rates.
The coalition initially reduced production by about two million barrels, on the occasion of the meeting of its twenty-three members in Vienna, after a long series of video meetings due to the Covid epidemic.
Last May, nine members, including Saudi Arabia and Russia, announced sudden voluntary cuts totaling 1.6 million barrels per day.
In a “Saudi gift,” in the words of Saudi Energy Minister Prince Abdulaziz bin Salman, Riyadh reduced its production a month later by up to an additional million barrels, a decision that was extended monthly until the end of 2023, and Russia also adopted it, although to a lesser extent.
But despite these announcements, the two benchmark crude indices barely rose compared to June (almost +5%), even if they were higher than the average of the past five years.
Prices are currently approaching the threshold of $80 per barrel ($84.02 per barrel for Brent crude and $78.66 per barrel for West Texas Intermediate crude Thursday, around 10:30 GMT) after a short-term rise in Brent crude to nearly $100 at the end of September. the past.