Opec+ delays online meet on oil production, supply curbs to Dec 5

By Grant Smith, Salma El Wardany and Fiona MacDonald 

Opec+ will delay Sunday’s online meeting on oil production curbs to Dec. 5, according to delegates who asked not to be identified. 

The group is set to discuss whether to proceed with reviving supplies, beginning with an increase of 180,000 barrels a day in January. Delegates said earlier this week that talks have begun on delaying the move, potentially for several months. 

Formally, the postponement of the meeting is because ministers have conflicting travel, the delegates said. Some ministers will attend the meeting of the Gulf Cooperation Council in Kuwait on Dec. 1, one added. 

 

Still, in the past the Organization of Petroleum Exporting Countries and its partners have shifted meeting dates when they need more time to hammer out a deal. Coalition leaders Saudi Arabia and Russia have made trips this week to fellow members Iraq and Kazakhstan. 

The alliance confronts an uncomfortable dilemma: to prolong the curbs well into 2025, or risk tipping global markets into a glut.  Even extending the restraints all year won’t prevent a considerable supply overhang, according to the International Energy Agency. Crude futures have lost 17 per cent since early July, trading just below $73 a barrel in London on Thursday.  

“Opec+ are stuck between a rock and a hard place,” said Harry Tchilinguirian, head of oil research at Onyx Commodities Ltd. 

On Tuesday, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman met with Russian Deputy Prime Minister Alexander Novak and Iraqi Prime Minister Mohammed Shia Al-Sudani in Baghdad. They discussed the importance of keeping markets balanced and fulfilling commitments to cut production. On Wednesday, the Saudi and Russian ministers spoke with their Kazakh counterpart, Almassadam Satkaliyev.  

Iraq, Russia and Kazakhstan have struggled in implementing their share of Opec+ cutbacks pledged this year, but the group’s data indicate they’ve performed better in recent months.  

Oil’s muted performance this week is another sobering signal for the group. While Brent initially surged on Tuesday after Bloomberg reported Opec+ was discussing another delay to its production increase, the international benchmark ended the day lower. Traders remain focused instead on faltering demand growth in China, plentiful supply from the Americas and the agreement to ease conflict in the Middle East.