OPEC+ unlikely to change oil prices at panel meeting on 1 February
Five OPEC+ sources indicated on Tuesday that an OPEC+ panel is likely to support the producer group’s current oil output policy when it meets next week. This is because concerns about inflation and a global economic downturn outweigh optimism for increased Chinese demand to drive up oil prices.
On February 1, virtual ministerial meetings of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia, are to be held. If necessary, the Joint Ministerial Monitoring Committee (JMMC), can call an entire OPEC+ gathering.
The gathering takes place at a time when oil prices have risen toward $90 per barrel in 2023 amid expectations that Chinese demand will rebound and as the European Union and the Group of Seven (G7) prepare to extend a price cap on Russian crude to refined products starting on February 5.
Five OPEC+ sources told Reuters that the JMMC would discuss the outlook for the economy and the size of Chinese demand but was unlikely to recommend changes to the current course of action. According to one, any changes would be unlikely given the oil market’s rebound in 2023.
One of them said, “We will definitely talk about China’s economy and inflation.” “No goals have been set for this meeting. This will merely be a JMMC with no decisions or suggestions, not an OPEC+ meeting.”
Suhail al-Mazrouei, the energy minister of the United Arab Emirates, echoed similar comments made by his Russian colleague Alexander Novak on January 16 when he said that the market was in equilibrium. Both ministers are members of the JMMC, which is co-chaired by Prince Abdulaziz bin Salman, the Saudi Arabian energy minister, and Novak.
Another OPEC+ source stated that “OPEC+ is by this point somewhat comfortable that the difficult time of COVID’s impact is behind us and that the geopolitical circumstances and China’s resurgence are driving the volatility.”
When OPEC+ decided in October to decrease output by 2 million barrels per day (bpd) from November through 2023 rather than pumping more to lower petroleum prices and support the global economy as the U.S. advocated, it infuriated the United States and other Western countries.
The group’s policy was not updated at their most recent meeting in December, and their next full meeting is not expected until June.
Source: Energy Ghana
