VIENNA (AFP) – Members of the Organization of the Petroleum Exporting Countries plus (OPEC+) cartel of oil-producing nations are likely to maintain current output cuts at their biannual meeting tomorrow, analysts told AFP, opting for caution in the face of geopolitical uncertainties.
Analysts told AFP they expected the status quo to be upheld at tomorrow’s gathering, where 22 energy ministers will meet virtually.
Prices for the black gold have changed little since the last meeting in November, increasing only by around three to four per cent. “I expect OPEC+ to roll over the current quotas,” analyst at PVM Energy Tamas Varga told AFP.
“The supply-demand balance suggests that no change is needed, otherwise prices would fall.”
After the last meeting in November, several countries including Saudi Arabia and Russia said they would further slash production in an effort to prop up volatile prices.
An analyst at UBS Giovanni Staunovo told AFP that the “eight member states with voluntary production cuts are likely to extend them.” The OPEC+ alliance – comprising the 13-member OPEC and its 10 partners – has a reserve capacity of nearly six million barrels per day, according to the International Energy Agency (IEA).
Varga said the “biggest issue is to credibly convince the market that those with lax compliance will make amends in coming months”.
High interest rates across the world tend to curb demand for crude oil, with fears of a rebound in inflation in the US and scepticism around China’s economic recovery dampening confidence.
And all global discussions now come under the shadow of geopolitical tensions in the Middle East.
