Wednesday 27 Nov
The OPEC+ alliance, led by Saudi Arabia and Russia, is set to hold its scheduled meeting this week virtually. This marks the third consecutive online meeting for the group, despite initial plans for an in-person gathering at its Vienna headquarters.
While no official reason has been given for the shift to a virtual format, the decision was anticipated. Key OPEC+ members are expected to discuss the resumption of halted oil production, a plan that has already been delayed twice.
Delegates, who requested
anonymity, did not give a reason for the changes to the December 1 conference.
The change had been expected for several days.
Eight OPEC+ countries recently
agreed to extend voluntary production cuts until the end of December 2023. The
group is still committed to increasing production by 2.2 million barrels per
day starting in January 2024, but this plan could be adjusted based on market
conditions.
Oil prices have been volatile in
recent months, falling 15% since July due to weaker Chinese demand and
increased US supply. These lower prices pose challenges for major oil producers
like Saudi Arabia, which requires higher oil prices to fund its ambitious
economic transformation plans.
Oil prices are heading for their
biggest weekly gain since early October as hostilities between Russia and
Ukraine escalate.
Experts and analysts polled by
Bloomberg last week doubted that OPEC+ would increase production next year.
Both Citigroup and JPMorgan Chase expect an already expected surplus to push
crude prices to around $60 a barrel, warning that prices could fall further if
the alliance increases production.
Since the COVID-19 pandemic and
the Russian-Ukrainian war, the 23-member OPEC+ alliance has primarily relied on
virtual meetings. The group's in-person gatherings have become less frequent,
with the last physical meeting in Vienna taking place in June 2023.
At the group's previous meeting in June, Saudi Arabia issued a last-minute invitation to the seven other members currently participating in supply cuts to meet at the Ritz-Carlton hotel in Riyadh.
