Members of OPEC’s oil representatives group and their partners will meet via video conference on Monday to decide on production rates for February, hoping to turn the corner on a difficult year.
The OPEC + ministerial meeting comes after oil consumption plummeted in 2020 as a result of the Covid-19 pandemic and a price war between Saudi Arabia and Russia.
Despite a rise in prices near the end of last year, market levels for black gold remain uncertain.
Following their last conference, from 30 November-3 December, OPEC + members agreed to increase production by half a million barrels per day in January.
Also at that meeting the 13 members of OPEC cards, led by Saudi Arabia, and their six friends, led by Russia, agreed to meet at the beginning of each month to decide on any changes to yield volumes for the next month.
Russia and Saudi Arabia are the second and third largest oil producers in the world after the United States.
The decision reflects OPEC ‘s desire to maintain a strong impact on the oil market and the dire situation for crude producers last year.
– ‘Uncertainty of application left’ –
Prior to the pandemic, OPEC members were satisfied with two peaks per year at the agency ‘s headquarters in Vienna.
“Finally, we saw a strong demonstration of OPEC +’ s willingness and ability to regulate the market, laying the foundation for Brent ‘s recovery to more than $ 50 per barrel despite remaining demand uncertainty. in the market, “JBC Energy analysts said in a statement.
The two reference contracts, North Sea Brent Crude and West Texas Intermediate (WTI) ended the week around the $ 50 per barrel level, well below the prices seen at the beginning of 2020 but well up on the low levels seen last year.
In March, Moscow and Riyadh began a brief but intense war in oil prices that led to falling prices.
On April 20, West Texas Intermediate Crude (WTI) fell to minus $ 40.32 per barrel – meaning producers paid consumers to take the oil off their hands.
The climate between the two oil giants has eased since then, with Russia and Saudi energy ministers meeting in mid-December in a show of unity.
It remains difficult, however, to predict how demand will continue as governments begin to roll out vaccination programs against the coronavirus.
Last month, OPEC was forecasting a slight resurgence in the market noting continued uncertainty, particularly in the transport sector.
Despite the capture of OPEC + countries, countries outside the system have a significant impact on the oil market; especially the United States which still produces 11 million barrels of crude per day.
Even within its ranks, OPEC must pay attention to developments in the three members who received exemptions from quotas – Libya, Iran and Venezuela.
Libya’s ouster has almost been wiped out by civil conflict but has been spinning since October after signing a ceasefire.