OPEC+ fails to agree on Output- hike delay before big meeting2 min read

BY- ANSHUMAN SRIVASTAVA A panel of OPEC+ ministers could not reach to an agreement on whether to delay January’s oil-output increase or not, leaving the matter unresolved before a full meeting of the cartel and its allies on Monday.

Most of the participants in the online discussion held on Sunday evening supported to maintain the production curbs at current levels into the first quarter, said a delegate. While Alexander Novak, Deputy Prime Minister of Russia, spoke in favour of postponing the supply hike that’s currently scheduled to happen in the next year, the United Arab Emirates and Kazakhstan were opposed by the other participants. The delegate who gave all this information requested not to be named because the talks were at private level.

Mohammad Darwazah, an analyst at research firm Medley Global Advisors LLC observed that Saudi Arabia will have to lean hard to get an agreement.

OPEC+pumps more than half of the world’s crude oil, made big production cuts during the depths of the pandemic to offset a historic collapse in fuel demands. The Organization had planned to ease some of those curbs at the start of the next year,2021, in anticipation of a global economic recovery.

There have been numerous indicators that the cartel was leaning towards a delay. Last week, Abdelmajid Attar, Algerian Energy Minister, who t holds OPEC’s  presidency this year – told a News agency that the group must be careful as the rise in oil prices above $45,a barrel in New York this week could prove to be fragile.

After considering and analysing the data, the technical experts of OPEC+ pointed to the risk of a new oil surplus if theincrease in production goes ahead.

Before this weekend, most of the OPEC+ watchers were expecting the group to keep pumping at current levels for the next few months longer due to lingering uncertainty about the strength of demand. However, the decision has become hazy by public complaints from Iraq and Nigeria, and private conflict with the UAE, all of which have chafed at their output limits this year.

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