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OPEC + talks were stalled on Monday after the group failed to reach consensus on the best way forward for oil production, the body reported on Monday afternoon.
The OPEC and non-OPEC ministerial meeting, held on Monday, will now resume on Tuesday, January 5, giving the group more time to discuss among themselves and come to some sort of agreement. on February oil production.
The group has been unable – so far – to come to an agreement, with some countries pushing for a production increase of 500,000 barrels per day and others hoping to stay the course given continued sluggish demand and small signs of rising as the new extravirulent strain of Covid-19 begins to spread to more countries. The group’s two heavyweights, Russia and Saudi Arabia, are again on the opposite end of the spectrum, with Saudi Arabia pressuring the group to cancel the additional production rolled out in January of 500,000 b / j, and Russia hoping for a substantial increase of 500,000 bpd. The chasm between them now 1 million bpd. Saudi Arabia, however, has said it will agree to stay the course in February.
Saudi Arabia’s position is supported by Oman, Iraq, Algeria, Nigeria and Kuwait. Kazakhstan supports Russia’s position.
These two members have the most influence in the group, with Saudi Arabia being the producer of swing. And it was these two members who also drove oil prices down in March when they argued over this same issue. That feud involved the two countries ramping up their oil production to the point of further saturating an already saturated oil market just before months and months of lockdowns that reduced demand for crude.
Ahead of Tuesday’s meeting, the groups will hold bilateral talks and be able to consult with their own governments, delegates said, according to Reuters.
The market should prepare for more volatility this year thanks to OPEC, with meetings scheduled every month.
By Julianne Geiger for OilUSD
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