BLOG: Poll Results Show 'Nothing' Will Be Decided at Next OPEC Meeting
Nothing will be decided at the June 22 OPEC meeting, according to a new Rigzone poll on social media platform Twitter.
What do you think will be decided at the next OPEC meeting on June 22?— Rigzone (@Rigzone) 31 May 2018
Almost half (46 percent) of the 591 respondents in the poll thought OPEC wouldn’t be able to come out of the meeting with a concrete decision, compared to 21 percent who thought a slow production increase would be agreed at the gathering.
Seventeen percent thought OPEC would decide not to increase production at the meeting and 16 percent thought a rapid production increase would be agreed.
Towards the end of 2016, OPEC and non-OPEC countries agreed to implement production cuts, effective January 1, 2017, for a 6-month period. In May of last year, these cuts were extended for another nine months.
On November 30, 2017, OPEC and non-OPEC countries decided to extend cuts through the entirety of 2018. OPEC’s June 22 meeting will determine what happens next.
Bloomberg reported that Saudi Oil Minister Khalid Al-Falih said OPEC and its allies were likely to boost output in the second half of the year. If that is the case, then a decision to wind down cuts on June 22 wouldn’t be all thatsurprising.
As for the speed at which this wind down could happen, Reuters reported that “both Russia and the OPEC leader Saudi Arabia have spoken about the need for a gradual increase in oil production,” which suggests that any output increases would be slow.
Looking at specific numbers, it’s difficult to predict precisely what production adjustments would be hammered out but Bloomberg has given some indication, reporting that “a person familiar with the matter” said oil producers were debating an increase ranging between a Saudi Arabia-backed 300,000 barrels per day at the low end and a larger Russia-favored increase of about 800,000 barrels per day.
Whatever happens at the June 22 meeting, the outcome is bound to have a notable effect on our industry.
WHAT DO YOU THINK?
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- Saudi Cuts Oil Output As OPEC Points To 2019 Surplus (Aug 13)
- OPEC Sources: Saudis Cut July Production (Aug 03)
- Reuters Survey: OPEC July Oil Output Hits 2018 Peak, But Outages Weigh (Jul 30)