OPEC+ meeting has been delayed to end on november due to disagreement between members
The OPEC+ alliance is experiencing renewed internal conflict, leading to a postponement of their meeting originally set to discuss the output policy for 2024.
This development had a significant impact on the market, with Brent crude oil prices dropping yesterday by up to 4.9% at one point. Despite this, the market recovered somewhat, closing with a modest decrease of 0.59%.
Initially planned for 26 November, the OPEC+ meeting has been rescheduled to 30 November due to disagreements among several members over their production quotas for the upcoming year.
These quotas were initially set in June, but countries like Angola, Congo, and Nigeria, who are facing reduced targets for 2024 after failing to meet this year’s quotas, have expressed dissatisfaction.
There was an understanding that these targets would be reviewed and potentially increased by the end of the year, but this hasn’t occurred yet. Angola’s production target was reduced from 1.46 million barrels per day in 2023 to 1.28 million for 2024, Congo’s from 310,000 barrels per day to 276,000, and Nigeria’s from 1.74 million to 1.38 million.
While Angola and Congo are producing below their 2024 targets, Nigeria has exceeded its future target, currently producing around 1.49 million barrels per day.
These disagreements among members could lead to increased market volatility in the coming week, and it’s uncertain how this will influence broader policies, including Saudi Arabia’s decision on whether to extend its additional voluntary cut of 1 million barrels per day into early 2024.
The latest report from the Energy Information Administration (EIA) indicated a bearish trend with a significant increase in U.S. crude oil stocks, reaching the highest levels since July at over 448 million barrels.
Despite below-average refinery utilization following an extensive maintenance season, gasoline inventories saw a slight increase. However, the distillate market is tightening, with distillate fuel oil inventories dropping to just under 106 million barrels, the lowest for this time of year in at least two decades. The expectation is that middle distillates will continue to have strong demand.
Article based in a story grom ING Bank as copyright owner