OPEC AND ALLIES HOLD STEADY ON OUTPUT GOALS
▶ Producers expected to leave quotas vague as committee meets in Algiers
Opec and allies have ended day one of their joint ministerial monitoring committee meeting in the Algerian capital with no significant pledge to boost output.
The move to stay the course adopted by de facto Opec leader Saudi Arabia and the UAE, which currently holds presidency of the exporters’ group, may come as a snub to US President Donald Trump. He tweeted ahead of the meeting that the producers had been maintaining prices artificially high.
“I do not influence prices,” Saudi oil minister Khalid Al Falih said in Algiers, adding that the market had been “adequately supplied”, news agencies reported.
“I don’t know of any refiner in the world who is looking for oil and is not able to get it,” he said.
The Algiers meeting comes amid a steady climb in the price of benchmark Brent, which is close to breaching the $80 per barrel mark after having averaged $72 per barrel for much of the year. The convening of Opec and producers outside the group led by Russia, which is a co-head of the monitoring committee, is tense following threats by Iran to veto decisions to allot supply quotas.
Tehran is desperately selling its oil to the market at a time of increasing squeeze by the White House, which has indicated November 4 as the deadline for Iran’s buyers to reduce their imports to zero.
A flood in the market, which had been Opec and its allies’ worst nightmare, is undesirable for Iran as it will lead to an even lower price for its exports, particularly when about 1.5 million of its barrels are expected to drift off the market.
Giovanni Staunovo, a commodity analyst at UBS, noted that the group and its allies, known as Opec+, are unlikely to mention any specific production increase in numbers today.
“Considering the August over-compliance of 129 per cent, that compliance level already allows a higher production over the coming months,” he said.
“Still, I remain sceptical that the press release will mention any production increase number, but it doesn’t exclude that a number is mentioned during the press conference similar to Vienna.”
At the Opec+ Vienna meeting in June, producers reversed an earlier agreement to slash production and aimed to restrain output supply to meet 100 per cent compliance with agreed group quota.
Saudi Arabia is the only producer within the group that has the potential to boost production short-term. The world’s biggest oil exporter has added about 450,000 barrels per day since the beginning of the year.
The UAE, which accounts for 4.2 per cent of global oil production, said it had significant spare capacity but was not in a hurry to “overuse” it.
“We still have a job to complete which is going to the 100 per cent [compliance],” UAE energy minister Suhail Al Mazouei said in Algiers.
Considering the August over-compliance of 129%, that allows a higher production over the coming months GIOVANNI STAUNOVO UBS analyst