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OPEC+ has delayed a meeting of oil ministers scheduled for today to give member states more times to come to an agreement about how they are to proceed with the addition of more production to global supply.
Bloomberg reports the meeting will now take place on Thursday, the same day that the regular meeting was scheduled for. The disagreement, unsurprisingly, is between Saudi Arabia and Russia—the biggest producers in the club.
According to the report, Russia supports a faster ramp-up of production. Saudi Arabia prefers to take things more easily and add production gradually. Analysts, meanwhile, expect OPEC+ to strike an agreement to bring back some 550,000 bpd, which is about a tenth of still shuttered production capacity. This is the median expectation. Some believe the cartel could bring back as much as 1 million bpd, while others suspect the group may leave things as they are.
"The choice OPEC+ now faces is whether to consolidate those gains and allow prices to stabilize, or to let prices rise further, attracting mounting ire from consumers," Standard Chartered analysts said in a note as quoted by Bloomberg this week.
Indeed, India has already—and again—called on OPEC+ to bring more barrels back to the market. The world's third-largest consumer and major importer relies on foreign oil for more than 80 percent of its consumption.
OPEC, for its part, remains cautiously optimistic. A Reuters report from earlier this week cited the cartel as still expecting oil demand to grow by 6 million bpd this year, with the growth particularly strong in the second half of the year as inventories shrink.
On the other hand, the cartel noted that newly emerging variants of the Covid-19 virus were a big risk for demand.
"The current 'wild card' factor is the 'Delta variant' of the pandemic that is resulting in rising cases and renewed restrictions in many regions," OPEC secretary-general Mohammed Barkindo said.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.