Opec+ meets Sunday to finalise new output policy

Major oil producers will hold a virtual meeting today to finalise production policy from August onward, Khaleej Times has learnt.

Industry analysts said major oil producers are expected to strike a deal on production increase when they resume talks today. They said ‘potential deal’ with a consensus over quota to each member will pave the way to supply more crude to a tight oil market and cool soaring prices in international market.

Benchmark US crude oil for August delivery rose 16 cents to $71.81 a barrel on Friday while Brent for September delivery up 12 cents to $73.59 a barrel.

In the previous two meetings earlier this month, the Organisation of the Petroleum Exporting Countries (Opec), Russia and other producers had failed to agree after the UAE sought a higher baseline for measuring its output cuts.

“All signs indicate that Opec+ is heading for a potential compromise agreement that will allow the UAE to secure a baseline adjustment. Other producers will undoubtedly seek similar treatment and potentially prolong the deliberations heading into the August ministerial meeting,” RBC Capital analysts said in a note.

Opec+ last year agreed record output cuts of almost 10 million barrels per day (bpd) to cope with a pandemic-induced slump in demand, curbs which have been gradually relaxed since then and now stand at about 5.8 million bpd.

— muzaffarrizvi@khaleejtimes.com