OPEC+ resumes talks amid divide on February oil output levels

OPEC- EnergyNewsBeat

UPDATE (7:23 AM MST): Russia agrees to rollover production

OPEC+ resumes debate on Tuesday after talks stumbled over February policy, with Russia leading calls for higher output and others suggesting holding or even cutting production due to new coronavirus lockdowns.

Debate resumes at 1430 GMT after the group, which combines OPEC and other producers including Russia, failed to find a compromise on Monday.

OPEC+ sources told Reuters that Russia and Kazakhstan backed raising production by 0.5 million bpd while Iraq, Nigeria and the United Arab Emirates suggested holding output steady.

An internal OPEC document, seen by Reuters on Tuesday and dated Jan. 4, suggested a 0.5 million bpd cut in February as part of several scenarios considered for 2021.

The document also said that the OPEC+ joint ministerial committee highlighted bearish risks and “stressed that the reimplementation of COVID-19 containment measures across continents, including full lockdowns, are dampening the oil demand rebound in 2021”.

 

Two OPEC+ sources said chances of a cut were slim as very few producers supported it.

“Two clear factions have formed – the Saudi-led proposal for a cautious approach to maintain oil prices and the Russia-led clarion call for a swifter return of supply to the market,” said Louise Dickson from Rystad Energy.

On Monday, Saudi Energy Minister Prince Abdulaziz bin Salman said OPEC+ should be cautious, despite a generally optimistic market environment, as demand for fuel remained fragile and variants of the coronavirus were unpredictable.

New variants of the coronavirus first reported in Britain and South Africa have since been found in countries across the world.

With benchmark Brent oil futures holding above $50 per barrel [O/R], OPEC+ took the opportunity to raise output by 0.5 million bpd in January as it looks to eventually ease cuts that currently stand at 7.2 million bpd.

OPEC+ producers have been curbing output to support prices and reduce oversupply since January 2017 and cut a record 9.7 million bpd in mid-2020 as COVID-19 hammered demand for gasoline and aviation fuel.

Reporting by Alex Lawler and Ahmad Ghaddar in London, Rania El Gamal in Dubai, Vladimir Soldatkin and Olesya Astakhova in Moscow; writing by Dmitry Zhdannikov; editing by Nick Macfie

MOSCOW/LONDON (Reuters) –

About Stu Turley 3230 Articles
Stuart Turley is President and CEO of Sandstone Group, a top energy data, and finance consultancy working with companies all throughout the energy value chain. Sandstone helps both small and large-cap energy companies to develop customized applications and manage data workflows/integration throughout the entire business. With experience implementing enterprise networks, supercomputers, and cellular tower solutions, Sandstone has become a trusted source and advisor.   He is also the Executive Publisher of www.energynewsbeat.com, the best source for 24/7 energy news coverage, and is the Co-Host of the energy news video and Podcast Energy News Beat. Energy should be used to elevate humanity out of poverty. Let's use all forms of energy with the least impact on the environment while being sustainable without printing money. Stu is also a co-host on the 3 Podcasters Walk into A Bar podcast with David Blackmon, and Rey Trevino. Stuart is guided by over 30 years of business management experience, having successfully built and help sell multiple small and medium businesses while consulting for numerous Fortune 500 companies. He holds a B.A in Business Administration from Oklahoma State and an MBA from Oklahoma City University.