OPEC+ is likely to stick to its existing deal to cut oil output at a meeting on Monday, five delegates from the producer group told Reuters, after oil prices recovered following a drop to 15-month lows.
Oil has recovered towards $80 a barrel for Brent crude after falling to near $70 on March 20, as fears ease about a global banking crisis and as a halt in exports from Iraq’s Kurdistan region curbs supplies.
OPEC+, which comprises the Organization of the Petroleum Exporting Countries and allies led by Russia, is due to hold a virtual meeting of its ministerial monitoring panel, which includes Russia and Saudi Arabia, on Monday.
“It is hard to expect any new development,” one of the delegates said of Monday’s talks. Another said the Kurdistan curbs and recent price drops were not sufficiently important to affect the overall OPEC+ policy path for 2023.
Three other OPEC+ delegates also said any policy changes were unlikely on Monday. After those talks, the next full OPEC+ meeting is not until June.
Falling oil prices are a problem for most OPEC+ members because their economies rely heavily on oil revenue.
Even so, OPEC+ delegates did not raise any suggestion of further action to support the market after the recent price drop and predicted prices would stabilize – which they have since shown signs of doing.
Last November, OPEC+ reduced its output target by 2 million barrels per day – the largest cut since the early days of the COVID-19 pandemic in 2020. The same reduction applies for the whole of 2023.
Saudi Arabia’s energy minister has said OPEC+ will stick to the reduced target until the end of the year. (Reuters)