OPEC+ Postpones Policy Meeting, Oil Prices Drop
OPEC+ Delays Meeting to Nov 30
OPEC+ has decided to delay its ministerial meeting to discuss oil output cuts from Nov. 26 to Nov. 30. This unexpected delay came as producers struggled to reach an agreement on production levels and potential reductions, causing oil prices to slide.
Challenges Linked to African Countries
According to three OPEC+ sources, the delay was linked to challenges faced by African countries. In June, OPEC+ had stated that the 2024 output quotas of Angola, Nigeria, and Congo were conditional on reviews by outside analysts.
Uncertainty in the Oil Market
The postponement of the meeting has injected uncertainty into the financial markets. The delay means that there will be a longer wait for clarity on OPEC+’s plans for the coming year, causing oil prices to decrease.
Reasons for the Delay
Russian Deputy Prime Minister Alexander Novak and Saudi Energy Minister Prince Abdulaziz bin Salman agreed to postpone the meeting due to issues surrounding other producers, according to another OPEC+ source.
Expectations and Predictions
The meeting was expected to convene in OPEC’s Vienna headquarters. Several analysts have predicted that OPEC+ is likely to extend or deepen oil supply cuts into next year. Some have even suggested that Saudi Arabia might request other members to share the burden of the adjustment.
Current Oil Market Situation
Oil prices have fallen from nearly $98 in late September to below $80, due to rising supplies, concerns about demand, and the possibility of an economic slowdown. Saudi Arabia, Russia, and other OPEC+ members have already pledged oil output cuts of about 5 million barrels per day, which accounts for approximately 5% of daily global demand.
Voluntary Reductions
This figure includes a 1 million bpd voluntary reduction by Saudi Arabia and a 300,000 bpd cut in Russian oil exports, both of which will last until the end of 2023.