The OPEC logo drawn before an informal meeting between members of the Organization of Petroleum Exporting Countries (OPEC) in Algiers, Algeria.
Lambsey Budina | Reuters
A group of the world’s most powerful oil producers will meet on Wednesday to discuss the implications New Omicron Covid Variant There may be energy demand.
The Organization of Petroleum Exporting Countries, led by Saudi Arabia, will meet via a video conference from 1:00 pm London time. A group of 13 members will be joined by non-OPEC allies like Russia on Thursday.
There are few signs that a larger group, often called OPEC +, intends to change course from the current production plan of 400,000 barrels per day of monthly hikes.
OPEC ministers representing Saudi Arabia and Iraq have shown that the group is likely to maintain this production policy, but non-OPEC leader Russia does not need to take urgent action in the oil market earlier this week. rice field.
Some analysts have questioned whether OPEC + could be tempted to pause to evaluate the market, Increased price volatility And fear of the potential impact of Omicron variants on energy demand.
In fact, some OPEC + producers are believed to have difficulty achieving their quotas next month if the group pushes for increased production.
Reuters Survey Release On Tuesday, OPEC pumped 27.74 million barrels per day in November, an increase of 220,000 barrels from October, less than the 254,000 increase allowed for OPEC members under the OPEC + agreement.
International benchmark Brent Crude oil futures traded in London on Wednesday afternoon at $ 72.62, up more than 4.8% in the session. US West Texas Intermediate Futures were $ 69.24, about 4.6% higher.
Recently, oil prices have skyrocketed. Both Brent and WTI futures contracts are on track to record a percentage of the sharpest monthly decline since March last year, down 16% and 21%, respectively.
“So far, Russia and Saudi Arabia [a] A brave face. ” Stephen Brenock, senior analyst at PVM Oil Associates in London, said in a research note.
Brenock said OPEC needs to discuss some issues this week, including the potential impact of Omicron variants on future demand. Release of US-led strategic stockpiles From oil importing countries Possibility of re-entry into Iran’s oil market..
“All in all, there are many indications that OPEC + will not initially boost oil production any further in order to keep the current price at around $ 70 / barrel.”
“OPEC + is neglecting because it has begun to slowly increase its supply, shelving the planned increase in January and taking a cautious approach to the decision to keep the allocation flat.”
The two-day OPEC meeting came after heightened tensions over rising oil prices between the United States and the Gulf countries, especially Saudi Arabia.
US President Joe Biden announced on November 23 that he will release oil in a coordinated manner among the United States, India, China, Japan, South Korea and the United Kingdom to cool the market.
Under this plan, the United States will release 50 million barrels from its strategic petroleum reserves. Of that total, 32 million barrels will be replaced in the coming months, and 18 million barrels will accelerate previously approved sales.
OPEC + Ignore repeatedly US pressure to increase oil supply to stop soaring fuel prices.
Amos Hochstein, Top Energy Diplomat of the United States, Told CNBC On Monday, the Biden administration said it was ready to release more barrels of oil in the event of another need. Hochstein has recently met with OPEC officials to improve US relations in the Middle East.
Brad Waddington, an economic and market analyst at Longview Economics, said markets could be overwhelmed by Thursday’s OPEC + conference unless OPEC + announces new production guidance for the months following January. ..
“Even if OPEC + announces a longer-term adjustment, there remains a downside risk to oil prices,” Waddington said, citing concerns about US-Iran nuclear negotiations and Omicron.
“In summary, there is probably a growing willingness to change plans within OPEC +. Whether important and compelling changes will be announced this week will be watched carefully and will be the key to oil price direction. “
Focus on oil production policy as Omicron shakes the market
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