What Will Happen at the Next OPEC Meeting?
According to Matt Smith, Kpler’s lead Americas oil analyst, OPEC’s meeting at the end of the month is unlikely to yield any deviation from the group’s current stance of increasing production each month by 400,000 barrels per day.
“We have seen the group be very measured over the last year, not reacting to near-term events, and we expect this to be the case once again, despite some overtures from UAE about boosting output faster,” Smith said in a statement sent to Rigzone.
“OPEC+ appears reluctant to isolate Russia given the strategic relationship it has built, but this meeting is likely to be trickier than previous ones, particularly if we see Russian crude exports significantly dropping by the time of the meeting,” Smith added in the statement.
Speaking to Rigzone last week, Joseph Gatdula, the head of oil and gas at Fitch Solutions, said there is definitely the potential for a collapse in OPEC+ agreement.
“The fallout in relations could be caused by OPEC raising production levels to help cool prices above earlier agreed production cut tapering of 400,000 barrels per day each month,” Gatdula told Rigzone.
“The increase in supply would help cushion the loss of Russian crude from markets and weaken Russia’s ability to sustain its resistance to sanctions,” he added.
The latest OPEC+ meeting, which was held via videoconference on March 2, noted that current oil market fundamentals pointed to a well-balanced market. It added that current volatility was not caused by changes in market fundamentals but by current geopolitical developments.
In the latest Joint Technical Committee of the Declaration of Cooperation meeting, which was held on March 1 in preparation for the OPEC+ meeting on March 2, OPEC Secretary General, Mohammad Sanusi Barkindo, encouraged the DOC’s participating countries to remain proactive, nimble and attentive to changing market conditions.
“No matter what challenges we may face, our efficacious and proven DOC framework will continue to be the modus operandi for our joint success and help move us, step by step and day by day, closer to achieving our common objectives,” Barkindo said in an OPEC statement. “This nimble and measured approach will once again pay off,” he added.
The next OPEC+ meeting is currently scheduled to take place via videoconference on March 31.
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