OPEC + talks stalled on Monday after the group failed to reach a consensus on the best path to oil production, the agency said Monday afternoon.
The OPEC and non-OPEC ministerial meeting on Monday will resume on Tuesday, January 5, giving the group more time to debate among themselves and reach an agreement on February oil production.
The group has so far been unable to reach an agreement, with some countries pushing for an increase in production of 500,000 barrels a day and others hoping to stay the course, given still sluggish demand and few signs of an increase such as closures and the new extravirulent strain Covid-19 are beginning to spread to more countries. The group’s two heavyweights, Russia and Saudi Arabia, are back at the opposite end of the spectrum, with Saudi Arabia pushing the group to push back additional production deployed in January by 500,000 bpd, and Russia expects a substantial increase of 500,000 bpd. The gap between them is now 1 million barrels per day. However, Saudi Arabia said it would agree to stay the course in February.
Supporting Saudi Arabia’s stance are Oman, Iraq, Algeria, Nigeria and Kuwait. Russia’s position is to support Kazakhstan.
These two members are the most influential in the group, with Saudi Arabia being the swing producer. And it is these two members who also subdued oil prices in March when they argued over the same issue. This dispute meant that both countries increased oil production to the point of further saturating an already saturated oil market just before months and months of closures that further eliminated crude oil demand.
Ahead of Tuesday’s meeting, the groups will hold bilateral talks and be able to consult with their own governments, delegates said, according to Reuters.
The market should prepare for more volatility this year courtesy of OPEC, with meetings scheduled to be held monthly.
By Julianne Geiger for Oilprice.com
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