What Is Likely to Happen at Next OPEC+ Meeting?
by Andreas Exarheas
click here to read the original article at Rigzone.com
*this article was not written by Roseland Oil & Gas
What is likely to happen at the next OPEC+ meeting in December?
That’s the question Rigzone posed to Carole Nakhle, Crystol Energy’s Chief Executive Officer, and James Davis, FGE’s Director of Short-Term Global Oil Service & Head of Upstream Oil, in exclusive interviews held recently.
“A lot can happen between now and December particularly on the geopolitical side with the U.S. elections and its ramifications on geopolitics (particularly Ukraine and Gaza wars as well as Iran sanctions) and subsequently oil markets,” Nakhle told Rigzone, responding to the question.
“Assuming no major changes, OPEC+ is likely to stick to its plans, as announced in [the] June meeting, and will continue to monitor the market closely as the new year unfolds,” Nakhle added.
In his response, Davis said, “before we start commenting on what to make of the OPEC+ meeting in December, we will want to see if the group goes ahead with the planned production increases that start in October”.
“We’ll also want to see what the market reaction to those increases (or not) is,” he added.
“Our base case shows OPEC+ unwinding some output in 4Q 2024 as planned, and then keeping output flat in 2025 at December 2024 target levels,” Davis went on to state.
OPEC+’s “required production level” in 2025 is 39.725 million barrels per day, according to a production table posted on OPEC’s website on June 2, which accompanied a statement on the 37th OPEC and non-OPEC ministerial meeting.
“In light of the continued commitment of the OPEC and non-OPEC Participating Countries in the Declaration of Cooperation (DoC) to achieve and sustain a stable oil market, and to provide long-term guidance and transparency for the market, and in line with the approach of being precautious, proactive, and pre-emptive, which has been consistently adopted by OPEC and non-OPEC Participating Countries in the Declaration of Cooperation, the Participating Countries decided to reaffirm the Framework of the Declaration of Cooperation, signed on 10 December 2016 and further endorsed in subsequent meetings; as well as the Charter of Cooperation, signed on 2 July 2019,” the statement said.
The statement highlighted that the participating countries decided to “extend the level of overall crude oil production for OPEC and non-OPEC Participating Countries in the DoC as per the attached [production] table starting 1 January 2025 until 31 December 2025” and “extend the assessment period by … three independent sources to the end of November 2025, to be used as guidance for 2026 reference production levels”.
They also decided to “reaffirm the mandate of the Joint Ministerial Monitoring Committee (JMMC) to closely review global oil market conditions, oil production levels, and the level of conformity with the DoC, assisted by the Joint Technical Committee (JTC) and the OPEC Secretariat” and to hold the 38th OPEC and non-OPEC Ministerial Meeting on December 1, the statement showed.
A separate statement posted on OPEC’s site on the same day revealed that OPEC+ countries which announced voluntary cuts in April 2023 and November 2023 – including Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman – held a meeting in person in Riyadh on the sidelines of the 37th OPEC+ meeting.
“The meeting was conducted to reinforce the precautionary efforts of OPEC+ countries, aiming to support the stability and balance of oil markets,” the statement noted.
“The aforementioned countries decided, in addition to the latest decisions from the 37th … [meeting], to extend the additional voluntary cuts of 1.65 million barrels per day that were announced in April 2023 until the end of December 2025,” it added.
“Moreover, these countries will extend their additional voluntary cuts of 2.2 million barrels per day, that were announced in November 2023, until the end of September 2024 and then the 2.2 million barrel per day cut will be gradually phased out on a monthly basis until the end of September 2025 to support market stability,” it continued, stating that this monthly increase can be paused or reversed subject to market conditions.
In its latest short term energy outlook (STEO), which was released earlier this month, the U.S. Energy Information Administration (EIA) forecast that OPEC+ crude oil production will average 35.73 million barrels per day in 2024 and 36.51 million barrels per day in 2025. The EIA projected in the STEO that this output would come in at 35.58 million barrels per day in the third quarter of this year and 35.74 million barrels per day in the fourth quarter.
The EIA’s OPEC+ production figures comprise OPEC members subject to OPEC+ agreements, plus Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan, and Sudan.
by Andreas Exarheas
click here to read the original article at Rigzone.com
*this article was not written by Roseland Oil & Gas