Opec ministers started hashing out the size of the cartel’s oil-production cuts for next year, as the group’s president called for caution in a fragile market.
The coalition that pumps half the world’s crude is debating whether to maintain supply at current levels or increase it as planned in January. Some members are concerned that global markets remain too weak to absorb more barrels while others want to sell more crude as prices surge amid hopes for virus vaccines.
Market-watchers have been expecting the cartel to agree on a three-month delay—and that also has bolstered oil prices. But as the meeting grew closer and divisions emerged, the number of options under discussion proliferated. A couple of hours into the call, the three-month delay was proposed, according to delegates, and so far there’s been no opposition. But delegates said it was likely a final decision wouldn’t be reached until Tuesday.
“We must be aware today that the market conditions of 2020 are likely to continue during the first quarter of 2021,” Algerian Energy Minister Abdelmadjid Attar, who holds Opec’s rotating presidency, said at the start of talks. “We must be cautious.”
Indicating a preference for a delay, he was then quoted by Algeria’s state news agency saying there was consensus, and he was optimistic there would be an agreement on a first-quarter extension.
Other options that have been floated are a two-month delay, and the possibility of gradually increasing output over a three or four month period.