Opec + sticks to November production plans, despite $ 80 oil – News
London – Brent oil hit a three-year high above $ 80 a barrel on Tuesday, boosted by unplanned outages in the United States and a strong recovery in demand after the pandemic hammers
Opec +, which has held regular meetings, agreed in September to continue its existing plans for a production increase in October. – Photo file
Opec + is expected to stick to an existing deal to add 400,000 barrels per day (bpd) to its November output when it meets next week, sources say, despite oil peaking in three years over $ 80 a barrel and consumer pressure for more supply.
The Organization of the Petroleum Exporting Countries and its Russian-led allies, known as Opec +, agreed in July to increase production by 400,000 b / d each month to phase out 5.8 million b / d j reductions. He also agreed to evaluate the deal in December.
“So far, we will stick to the 400,000 bpd hike plan,” one of the sources said.
Opec +, which has held regular meetings, agreed in September to continue its existing plans for a production increase in October.
The OPEC + Joint Technical Committee (JTC) meets on Wednesday to examine the market and present its findings to ministers.
In his opening remarks to the JTC, Opec General Mohammad Barkindo said the current Opec + deal helps keep the oil market in balance.
“Where we are today, OPEC and non-OPEC ministerial decisions to start returning 400,000 bpd to the market each month continue to help balance the need for incremental increases to meet demand, while guarding against the potential for oversupply, ”he said. , according to the Opec Twitter account.
The sources said OPEC + ministers, who are meeting online on Monday, will review the JTC’s findings before making a final decision.
Brent oil hit a three-year high above $ 80 a barrel on Tuesday, boosted by unplanned outages in the United States and a strong recovery in demand after the pandemic hammers. Prices were trading just below $ 80 on Wednesday.
The White House, which voiced concerns about high prices in August, said on Tuesday it was in communication with OPEC and figuring out how to deal with the cost of oil.
India, the world’s third-largest importer and consumer of oil, signaled on Tuesday that a surge in crude prices would accelerate the transition to alternative energy sources.
The energy ministers of Iraq, Nigeria and the United Arab Emirates, members of OPEC, have said in recent weeks that the group sees no need for extraordinary measures to change the existing agreement.
JTC’s agenda includes meeting existing cuts, which stood at 116% in August, meaning the group is cutting back more than expected as several members face national constraints on increasing production . This suggests a tighter oil market.
OPEC members Nigeria and Angola, Africa’s main oil exporters, will find it difficult to increase production to their OPEC + quota levels at least until next year due to sub-problems. -investment and maintenance, sources said.
This means that any significant increase in the group’s production would have to rely on producers with spare capacity, such as Saudi Arabia and the United Arab Emirates.
Barclays said the recovery in demand would exceed Opec + measures to reduce its restrictions “in part due to the limited ability of some producers in the group to increase production, which should drive the inventory cushion to the max. low level for decades “. – Reuters