Recently, there have been speculations and uncertainties as to whether the Organisation of Petroleum Exporting Countries and its allies (OPEC+) will agree to change crude oil output cuts for member countries when they meet in Vienna between December 5th and 6th.
This uncertainty was reinforced by a statement made yesterday by Neil Atkinson, the Head of International Energy Agency’s oil industry and market division. Reuters quoted Atkinson as saying that OPEC+ members will most likely not change the current output cut, pending the time they have a better understanding of trends in the global oil market.
“OPEC is quite likely to do what it has often done in the past: put off taking a decision which involves changing the current system until things become clearer.
“The Russians, we understand from press reports, are keen at least on the political level not to change anything immediately.
“There’s a lot of uncertainties out there, not least the U.S. shale outlook, strength in demand, the overall economic outlook, all the rest of it, that more likely than not they will leave it in place and meet again in March.”
Note that OPEC’s output cut for its members and allies currently stands at 1.2 million barrels per day. The oil cartel has maintained that cut virtually throughout the year, in a bid to ensure that oversupply in the market does not destabilise global oil prices.
Recall that Nairametrics earlier reported the International Energy Agency forecast that OPEC+ countries would face stiffer competition in 2020, no thanks to increased crude output from no OPEC+ countries such as Brazil, Norway, and the United States of America.
We pointed out that the projected competition would not be good for a country like Nigeria. This is because the country depends a lot on oil revenue to finance its budget. As such, it favours higher output and more dollars per barrel of crude.
In the meantime, it is yet to be seen how these possibilities play out. As a result, all concerned parties are looking up to OPEC and its allies to decide on Friday.