Top oil producers Saudi Arabia and Russia are planning to put on hold their recent efforts to provide the world with more crude after Washington and other countries said they would release stored oil to help lower prices, a WSJ report said, attributing the development to people familiar with the discussions.
Riyadh and Moscow have led OPEC and a group of other oil-producing countries in coordinating output closely amid a demand shock last year caused by the pandemic. Other members of that cartel, including the UAE, aren’t convinced a pause is necessary, according to these people, the report stated.
This comes as oil prices steadied on Thursday, as investors eyed how major producers respond to the US-led emergency oil release designed to cool the market and with Organization of the Petroleum Exporting Countries (Opec) expecting the release to swell inventories.
Brent crude futures gained 7 cents to $82.32 a barrel at 1127 GMT. US West Texas Intermediate (WTI) crude futures fell 12 cents, or 0.2 per cent, to $78.27 a barrel.
Opec expects the US release to swell a surplus in oil markets by 1.1 million barrels per day (bpd), a source from the group said.
The Opec, Russia and allies, together called OPEC+, will meet on December 1-2 to set policy. “The bold move from the oil importers has opened the door wide open for Opec+ to adjust its supply policy downwards at its next (meeting on) December 2, 2021,” Rystad Energy analyst Louise Dickson said.
Opec+ has been adding 400,000 barrels per day of supply since August, unwinding record output cuts made last year when pandemic curbs slammed demand.
Three sources said Opec+ is not discussing pausing its oil output increases, despite the decision by the US, Japan, India and others to release emergency oil stocks.
Opec members the UAE and Kuwait said they were fully committed to the Opec+ agreement and had no prior stance ahead of next week's meeting.
Iraq, also an Opec member, said it backs continuing Opec+'s existing plan of raising output by 400,000 bpd a month, saying the outlook for the oil market was unclear due to turbulence in global markets.
High oil prices have added to inflationary concerns. A coordinated release could add around 70-80 million barrels of crude supply to markets, analysts at Goldman Sachs said.
The US Department of Energy has launched an auction to sell 32 million barrels of strategic petroleum reserves for delivery between late December to April 2022. It plans to release another 18 million barrels soon.