The positions of the "OPEC +" countries differed, today, Tuesday, regarding the continuation or reversal of production cuts, which cast a shadow over crude oil prices.
Several scenarios emerged from the coalition countries regarding the next meeting; The first calls for extending the cuts to their current level (7.7 million barrels per day) for a period of three or four months after the scheduled date for reducing them to 5.8 million barrels per day, in early January 2021.
The second scenario is a commitment to reduce the cuts at the scheduled date (beginning of 2021) in one go, and the third is to reduce the reductions by gradually increasing production over a period of months, not all at once.
The energy ministers of the "OPEC +" coalition began a meeting, on Monday, to discuss the future of unprecedented cuts in production that began in May 2020, and the meeting ended with a brief statement that the participants will return to the discussion, today, Tuesday.
Information has filtered after the end of the first round of talks about extending it until Thursday, after it was scheduled to end today.
Saudi Arabia, the largest producer in "OPEC", is pressing to extend the cuts at their current level until at least the end of March. To maintain an upward trend in oil prices since their April crash.
Saudi public revenues depend by more than 80% on crude oil revenues, and they need a price that exceeds $ 80 a barrel to reach the point of balance in its general budget.
And, unlike Saudi Arabia, Russia, the largest non-OPEC producer in the alliance, appeared unenthusiastic about extending production cuts to their current level.
Russia believes, according to the statements of more than one official, starting from Energy Minister Alexander Novak and even Russian President Vladimir Putin, that the market has reached an acceptable equilibrium point and there is no need to extend the cuts.
On the other hand, Iraq, Nigeria, and Kazakhstan are pressing for the implementation of the reduction in the cuts to allow them to increase production on the scheduled date, and these countries did not originally abide by their quotas in these cuts, which angered other members.
The UAE insists that any extension of the cuts be linked to their current level of compliance with countries that did not adhere to their quotas in the first phase of the cuts agreement.
The "OPEC +" alliance includes the Organization of the Petroleum Exporting Countries "OPEC", and the number of its members is 13 countries led by Saudi Arabia, and producers from outside it led by Russia.
Faced with those differences, benchmark Brent crude futures, for February delivery, fell 37 cents, or 0.77%, to $ 47.51 a barrel.
No comments:
Post a Comment