Nov 16, 2020 - Energy & Environment

OPEC+ discussions happening ahead of pivotal meetings

Illustration: Rebecca Zisser/Axios

Illustration: Rebecca Zisser/Axios

OPEC+ committees are holding talks today and tomorrow ahead of pivotal meetings in two weeks that will decide the next steps in the group's production-limiting agreement.

Why it matters: The OPEC+ group — led by Saudi Arabia and Russia — could send more signals that they'll delay plans to lower the amount of joint production cuts in order to avoid undercutting the limited and fragile price recovery.

Where it stands: Under the current deal struck in April, the group would lessen the joint cuts by 2 million barrels per day starting in January. But the pandemic's spread is still badly blunting demand, leading analysts to predict they'll hold off.

What they're saying: "The oil trading world is expecting, and has likely gambled on, the alliance to scrap plans of boosting its oil production by 2 million bpd from January," Rystad Energy's Bjornar Tonhaugen said in a note this morning.

  • Tonhaugen said signals "point to a roll-over of current targets for 3 or 6 months, as OPEC+ ministers know that anything less will lead to a huge disappointment in the market and sub-40 oil prices very quickly."
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