The OPEC + technical meeting ended on Monday with widespread support for a three-month extension of the current level of oil production cuts, sources told Reuters on Monday.
OPEC sources indicated last week that a number of members were supporting production cuts, down from 2.0 million bpd in January to 5.7 million bpd.
Other members were in favor of even more drastic measures, including a cut in the cuts that followed in January.
While the agreement to keep the group on it appears to support the majority of the group’s members, the challenges remain. Some members, including Iraq, have indicated that they cannot go to an agreement until it receives unanimous support from all members.
Meanwhile, Libya, which it intends to continue to exempt from production cuts until its production stabilizes at around 1.7 million bpd, now keeps adding production to the mix that the country has for months. The blockade causing harm has ended. This reality has added about one million barrels per day to the mix when OPEC + is desperately trying to remove the barrel from the market.
No matter how many barrels of current level oil cut expansions have actually been removed from the market, any move by OPEC + to extend reductions beyond January will be received favorably by the market and oil Prices should increase.
Despite OPEC’s finest efforts to counterbalance the oil markets, the cartel has been under the gun with oil demand and the epidemic falling apart with lockdown.
Oil prices were eagerly waiting for direction from the group, and by 3:15 pm, Brent was trading at $ 1.08 (2.52%) at $ 43.86 a barrel.
Next on OPEC’s agenda is the Joint Ministerial Monitoring Committee, which will recommend what OPEC + should do next. The final OPEC meeting on November 30 and December 1 is expected to come to a final decision.
By Julian Geiger for Oilprice.com
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