London – OPEC+ isn’t planning to make any changes to oil production policy at next week’s monitoring meeting, several delegates from the group said.
Saudi Arabia and its allies have just this month started new production cutbacks and need more time to assess their impact, said the officials, who asked not to be identified. The group’s Joint Ministerial Monitoring Committee is due to convene online on Feb. 1.
Oil prices have so far shown a muted response to the additional 900,000 bpd supply reduction being undertaken by OPEC and its partners, which comes alongside geopolitical tensions including a conflict in the Middle East and attacks on shipping in the Red Sea. Brent crude has gained a few dollars this year to trade near $80 a bbl in London.
Nonetheless, such levels are probably enough to forestall further action by the cartel for the time being, said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt.
“Thanks to the high price level, the JMMC is unlikely to call for a strategy change,” Fritsch said.
The OPEC+ monitoring committee will meet on Thursday via a videoconference that’s due to start at 12pm Vienna time, where the group’s headquarters is located.
There are no plans to issue policy recommendations at the session, which will instead focus on reviewing OPEC+ oil production levels at the end of last year, one official said. Full data for January — the first month of the new curbs — won’t even be available in time for the meeting, the person said.
The latest oil production curbs — which deepen previous reductions made last year — are due to last for the first quarter, and Riyadh has said they could “absolutely” be prolonged. Delegates said a decision on any extension is more likely to happen in the months ahead.
*Grant Smith, Fiona MacDonald & Salma El Wardany – Bloomberg
