Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) are set to meet up on Wednesday (Sep.1) to discuss the previously agreed increase of 400,000 barrels per day (bpd).
A source told Reuters Wednesday’s meeting will likely proceed with the plan without changes to the cartel’s policy and despite pressure from the White House to produce more oil.
Earlier this month, the Biden administration surprised the oil market calling on OPEC+ to raise output in an effort to bring U.S. gasoline prices down amid concerns that rising inflation could derail the economic recovery from Covid.
“It looks like sticking to the plan from the last meeting,” an OPEC+ source told the news agency.
Kuwait’s oil minister said on Sunday (Aug.29) the plan to add another 400,000 bpd of supply each month through December could be reconsidered amid concerns about COVID-19 infections in Asia limiting fuel demand.
Kazakhstan’s Minister of Energy Nurlan Nogayev told TASS on Tuesday (Aug.31) that
OPEC and its oil-producing partners will discuss “certain points” regarding the oil production adjustments at Wednesday’s meeting. Nogayev also noted that any potential decision to alter the parameters of the OPEC+ deal should be supported by all members, adding that his country sees measures currently in place as sufficient to stabilize the oil market.
In the spring of 2020 the cartel agreed to cut oil production to nearly 10 million barrels a day, as global oil demand had fallen by nearly a third due to lockdowns. But it has gradually raised output since, with the cut eased to about 5.8 million bpd as of July, noting that worldwide oil demand showed “clear signs of improvement and OECD stocks falling, as the economic recovery continued in most parts of the world.”
Oil prices slipped early on Tuesday (Aug. 31) with the U.S. benchmark WTI Crude down 1.29% at $68.38, and the international benchmark Brent Crude down by 0.94% at $72.78. Analysts say oil prices won’t go much higher this year.
Brent Crude prices are set to average $68.02 per barrel throughout this year, while WTI Crude, is expected to average $65.63 this year, down from a forecast of $66.13 last month, according to 43 analysts and economists who took part in a Reuters poll.
OPEC was founded on 14 September 1960 in Baghdad, Iraq by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela). These countries were later joined by Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975), Angola (2007), Equatorial Guinea (2017) and Congo (2018).
Ecuador suspended its membership in December 1992, rejoined OPEC in October 2007, but decided to withdraw its membership of OPEC effective 1 January 2020. Indonesia suspended its membership in January 2009, reactivated it again in January 2016, but decided to suspend its membership once more at the 171st Meeting of the OPEC Conference on 30 November 2016. Gabon terminated its membership in January 1995. However, it rejoined the Organization in July 2016. Qatar terminated its membership on 1 January 2019. This means that, currently, the Organization has a total of 13 Member Countries.
OPEC+ was formed in late 2016 to have more control on the global crude oil market. OPEC+ countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan OPEC has since 1965 been headquartered in Vienna, Austria.
The 20th OPEC and non-OPEC Ministerial Meeting, is set to take place via videoconference from 5 pm CET tomorrow.
OPEC+ agreed to stick to their existing policy of gradual oil output increases, meaning that the cartel will release 400,000 bpd to the market in October again, after already doing so in September. The next OPEC+ meeting is scheduled for Oct. 4.