Sources in OPEC+ have indicated that the coalition has postponed a ministerial meeting that was expected to discuss oil production cuts to November 30, instead of the previously scheduled date of November 26. This decision comes amid disagreements among producers regarding production levels and potential cuts, leading to a further drop in crude oil prices. Three sources within OPEC+ mentioned that the issue is related to African countries. The OPEC+ alliance stated after its latest meetings in June that production limits for 2024 in Angola, Nigeria, and the Congo were contingent on assessments from external analysts.
The upcoming meeting scheduled for this Sunday for the OPEC+ coalition, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, was expected to discuss further changes to an agreement that already restricts supplies until 2024, according to analysts and sources in OPEC+. Giovanni Staunovo, an analyst at UBS, commented, "The uncertainty is not good for financial markets at all, as markets will now have to wait longer for a clear picture regarding OPEC+'s actions next year." He added, "The delay of the meeting also shows that there are differing viewpoints among the participants in the group."
Brent crude fell 49 cents to $81.96 per barrel at settlement, recovering from earlier losses of nearly five percent following reports indicating that the dispute involved producing countries in Africa among smaller exporters in OPEC. This led some investors and analysts to downplay the significance of the matter that caused the delay. The price dropped from around $98 in late September due to rising supplies and concerns regarding demand and potential economic slowdown.
Another source in OPEC+ stated that Russian Deputy Prime Minister Alexander Novak and Saudi Energy Minister Prince Abdulaziz bin Salman agreed to postpone the meeting, pointing to issues related to other producing countries. The meeting was expected to take place on Sunday at OPEC's headquarters in Vienna. The organization's statement did not specify whether the meeting would be held online or in person on November 30, but three representatives indicated it is expected to be held in person in Vienna.
Will there be additional cuts? Many analysts predict that OPEC+ will likely extend oil supply cuts or even increase them next year. Some, including Halima Croft, an analyst at RBC Capital, stated that Saudi Arabia might ask other members to share the burdens. Croft noted this week, "We see some room for the group to increase cuts, but we expect Saudi Arabia to seek to have some oil from other members to share the adjustment burden."
Before the OPEC statement, Bloomberg reported that representatives indicated the meeting might be postponed indefinitely as they suggested that Saudi Arabia expressed dissatisfaction with the production figures of other members. Saudi Arabia, Russia, and other OPEC+ members have already pledged to reduce oil production by about five million barrels per day, or nearly five percent of global daily demand, in a series of measures that began in late 2022. This figure includes Saudi Arabia's voluntary production cut of one million barrels per day and Russia's reduction of oil exports by 300,000 barrels per day, with these cuts continuing until the end of 2023.
