OPEC + talks stalled on Monday after the group failed to reach a consensus on the best course of action for oil production, the body said Monday afternoon.
The OPEC and non-OPEC ministerial meeting on Monday will resume on Tuesday (January 5th), giving the group more time to discuss each other and reach some sort of agreement on February oil production.
The group has so far failed to reach an agreement, with some countries lobbying for an increase in production of 500,000 barrels per day, and others hoping to stay on track, given the still weak demand and small signs of a growths such as blockages and the new extra-virulent strain Covid-19 are beginning to spread to several countries. The two heavyweights in the group, Russia and Saudi Arabia, are again at the opposite end of the spectrum, with Saudi Arabia pressing the group to return to additional production launched in January of 500,000 bpd, and Russia hopes for a substantial increase of 500,000 bpd. The gap between them now 1 million bpd. However, Saudi Arabia has said it will agree to stay the course in February.
Supporting Saudi Arabia’s position are Oman, Iraq, Algeria, Nigeria and Kuwait. Supporting Russia’s position is Kazakhstan.
These two members have the most influence in the group, with Saudi Arabia being the swing producer. These two members also filed for oil prices in March, when they quarreled over the same issue. This quarrel involved both countries accelerating oil production to the point of saturating an already saturated oil market just before months and months of blockages that eliminated more crude oil demand.
Before 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, thanks to OPEC, with meetings scheduled to take place monthly.
By Julianne Geiger for Oilprice.com
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