The Organisation for the Petroleum Exporting Countries (OPEC) has opted to defer the crucial meeting for finalizing 2024 output levels to November 30, extending the deadline by four days. Reports from Bloomberg and Reuters indicate that the delay is primarily attributed to challenges arising from debates over output quotas for African members, particularly Angola and Nigeria, both requesting additional time to navigate lower targets imposed by more influential members.
Jorge Leon, Senior Vice President at Rystad Energy, observes, “This postponement indicates difficulties within the OPEC+ group to reach an agreement to cut production.” The meeting, inclusive of major producers such as Saudi Arabia and Russia, along with other allies and OPEC members, will delve into potential modifications to an existing deal that already restricts supply into 2024, as per insights from analysts and OPEC+ sources.
The postponement raises concerns of increased production from oil-producing nations in the coming months, warns Dennis Kissler, Senior Vice President of trading at BOK Financial. Furthermore, with a surge in inventories, there is added pressure on oil prices. To stabilize prices, John Evans of oil broker PVM emphasizes that OPEC and its allies must not only extend but also augment cuts.
Earlier this week, a significant development occurred as an OPEC technical panel invited a prominent financial market dealer to present a bearish outlook for the oil market. This move underscores the complexity and uncertainties surrounding the global oil landscape as OPEC+ navigates internal disputes and endeavors to chart a course for the future.