OPEC+ Holds Steady

OPEC+ decided to hold production steady at its latest meeting, which was conducted via videoconference on December 4.

The meeting followed a decision by the group back in October to cut overall production by two million barrels per day from its August 2022 required production levels, starting November 2022. According to a production table posted on OPEC’s website in October, Saudi Arabia and Russia are bearing the majority of these cuts at 526,000 barrels per day, each.

“In line with the decision of the OPEC and non-OPEC participating countries in the declaration of cooperation at the 33rd OPEC and non-OPEC ministerial meeting on 5 October 2022, which was purely driven by market considerations and recognized in retrospect by the market participants to have been the necessary and the right course of action towards stabilizing global oil markets; and adhering to the approach of being proactive and pre-emptive, the participating countries reiterated their readiness to meet at any time and take immediate additional measures to address market developments and support the balance of the oil market and its stability if necessary,” OPEC+ said in a statement posted on OPEC’s website following the latest meeting.

At the meeting, the group reaffirmed the adjustment of the frequency of Joint Ministerial Monitoring Committee (JMMC) monthly meetings to every two months and the authority of the JMMC to hold additional meetings, or to request an OPEC and non-OPEC ministerial meeting at any time to address market developments if necessary. The next OPEC+ meeting is scheduled to be held on June 4, 2023.

When asked in a televised CNBC interview if OPEC+’s latest production decision was the right move, Energy Aspects Oil Analyst Amrita Sen said, “I think so, yes”.

“The October move as well, equally, everybody was a bit like ‘why are you cutting production when fundamentals are so strong?’ - and the physical market was very, very, strong at that point – but I think again, that decision deserves a victory lap,” Sen said in the CNBC interview.

“It is the right decision to hold steady, especially if you don’t know how much, if at all, Russian production is going to fall after today,” Sen added in the interview.

OPEC made the right decision by keeping oil policy unchanged, @ea_amrita of Energy Aspects tells CNBC’s @dan_murphy pic.twitter.com/LsykZIyD4y

— CNBC Middle East (@CNBCMiddleEast) December 5, 2022

To contact the author, email andreas.exarheas@rigzone.com