OPEC+ decides against ramping up production, sticks to plan

MOSCOW, Nov 8 (PRIME) -- The OPEC+ alliance will not ramp up oil production ahead of the plan, but by 400,000 barrels per day in December, the organization said in a statement on November 4.

The organization also maintained the mechanism of compensation for oil production that was not reduced previously. The next meeting of OPEC+ was scheduled for December 2.

Kuwait’s Oil Minister Mohammed Al Fares said in a news conference after the meeting that all the forecasts and indicators point to excess of oil supply on the global market in 2022.

Saudi Energy Minister Prince Abdulaziz bin Salman said that OPEC+ expects the commercial oil reserves to start rising in December and continue growing in January–March 2022 thanks to the increase in production.

Russian Deputy Prime Minister Alexander Novak said that the organization is capable of reacting to changes in the situation on the oil market swiftly. If demand recovers significantly in spite of the seasonal factor, the organization will not take a long time to react, he said.

By making a decision for December, OPEC+ took into account the general global balance of demand and supply, he said when asked whether the position of the U.S. was taken into account.

Bloomberg reported quoting sources that Washington wanted OPEC+ to ramp up production by 600,000–800,000 barrels per day in December instead of the planned 400,000 barrels.

Novak explained that the decision was made on the back of a seasonal decrease of demand that usually happens in October–December and January–March, and because the coronavirus pandemic still exerts pressure on the market.

In an interview to Rossiya 24 television channel, Novak said that the oil price of U.S. $80 per barrel was an objective reflection of the current situation, and that it was difficult to say whether the price could grow to $100 per barrel.

OPEC+ compliance with the oil output reduction deal amounted to 115% in September, down from 118% in August, but still reflected reliable and responsible approach of all countries to the agreement, he said.

U.S. Secretary of Energy Jennifer Granholm said in an interview to CNN broadcast on November 7 that since OPEC ignored the U.S. call to ramp up production, U.S. President Joe Biden was studying other options of reducing the internal fuel prices, including fuel interventions from the strategic oil reserve.

The OPEC+ countries agreed to reduce their oil output by 9.7 million barrels per day in May 2020 to fight the consequences of the global coronavirus pandemic, with Russia’s share of 2.5 million barrels per day. Since August 2021, the alliance has been raising production by 400,000 barrels per day each month expecting to cancel the reduction liabilities at the end of September 2022.

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