OPEC+ reschedule meeting on oil output strategy
The OPEC+ oil alliance has rescheduled its meeting to finalize its crude production strategy to December 5, according to two delegate sources who spoke on condition of anonymity due to the sensitive nature of the discussions.
The coalition, comprising the Organization of the Petroleum Exporting Countries and its allies, was originally scheduled to meet on December 1 but will now hold a virtual meeting next week.
Several members reported that they have not yet received invitations for an in-person meeting of the alliance, which has also not started the usual logistical preparations for the December 1 gathering at its secretariat.
The upcoming OPEC+ meeting will be closely watched, as analysts from Citigroup Inc. and JPMorgan Chase & Co. question whether the group will proceed with planned output increases next year. They warn that an impending surplus is already driving crude prices toward $60 per barrel, and further price declines could occur if production increases.
If the shift to a virtual format is confirmed, it will mark the third consecutive time the Saudi Arabia- and Russia-led coalition has moved a meeting originally planned for Vienna to an online session.
At its previous meeting in June, Saudi Arabia extended a last-minute invitation to the seven members involved in supply cutbacks to gather at the Ritz hotel in Riyadh. There remains a possibility of a similar unexpected move this time.
OPEC+ has already postponed its plan to gradually restore curtailed production twice. Member countries are expected to revive 2.2 million barrels per day in monthly increments starting in January, a timeline pushed back from October due to weak oil prices.
Oil futures have dropped 15% since early July, weighed down by weak Chinese demand and rising U.S. supply. At around $75 per barrel, prices remain insufficient for Saudi Arabia and many other OPEC members to meet their government spending needs. According to the International Monetary Fund, Riyadh requires prices closer to $100 per barrel to fund its ambitious transformation plans.
The 23-member OPEC+ alliance has held only two in-person meetings in Vienna since Russia’s 2022 invasion of Ukraine disrupted Moscow’s political ties with the European Union and other regions. Most sessions since the Covid-19 pandemic have been conducted virtually.
