The important Oil-producing club OPEC starts its two-day conference Today. The conference will also host its non-OPEC partners influenced by Russia, and the reason for the meeting is to determine whether to increase and extend oil production decreases.
The gathering of the 14-member group OPEC and 10 non-member associates, acknowledged as OPEC+ will be hosted in Vienna, Austria.
The meeting occurs while oil rates are under extreme stress from lower interest due to the coronavirus outbreak. The demand in 2019 had previously also been rocked by the trade war between the U.S. and China.
OPEC and non-OPEC producers, driven by Saudi Arabia and Russia, initially assigned to reducing their combined oil production policy back in 2016 in an attempt to support prices, with the agreement begin in January 2017.
In December 2019, it was extended and the group accepted the plan to restrict oil output by around 1.7 million barrels per day. Saudi Arabia then decided to also decrease its production intentionally by an extra 400,000 b/d for 3 months.
Last February OPEC’s joint technical committee supported a plan for a 600,000 bpd decrease in oil production, and an expansion of the cuts to up to the end of 2020, to ease the extreme stress on oil prices.
Russia announced then that they hadn’t decided yet whether to approve the extra cuts.
There are statements now that Saudi Arabia will force a cut for as much as a 1.5 million bpd from the OPEC+ alliance however Russia’s permission is not a given.
In anticipation of the OPEC meeting today, a committee of oil ministers including those of Saudi Arabia and Russia, previously gathered in an attempt to beat out a preceding understanding over an output cut. However this gathering finished without deal, according to reports from Reuters, quoting unnamed sources.
OPEC meeting, to cut or not to cut
Andamento del mercato - 05/03/2020