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The OPEC meeting ended on Monday without an agreement among its members regarding the production cuts next year. Instead, the meeting ended with three of its heavyweights—Russia, Saudi Arabia, and the UAE—holding different opinions as to how to handle things going forward.
The meeting with OPEC+ was set to resume tomorrow, but a late—and a rather surprising—announcement came in the afternoon saying that the meetings had been rescheduled to December 3 as more talks are needed.
Saudi Arabia, as the predominant—and perhaps only—swing producer in the group is said to favor an extension of the current level of oil production cuts, according to an anonymous source who spoke to TASS.
Russia, the country that sank the deal in March over a similar issue, is said to favor a gradual increase in production starting in January.
The UAE, OPEC’s third-most prolific oil producer, is okay with extending the production cuts as-is into January and beyond only after all other OPEC members comply with their cuts. This was precisely what the UAE’s Energy Minister said a couple of weeks ago as well. The UAE made headlines last week after its largest state-run oil company, ADNOC, was rumored to be questioning the wisdom of its OPEC membership during these tough times.
The UAE’s Energy Ministry later issued a statement stressing the fact that it had always been a committed member of OPEC.
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The UAE either met or exceeded its 2.59 million bpd quota in September and October, according to OPEC’s Monthly Oil Market Report, but fell short of its goal in August.
The issue being bandied about is whether OPEC+ members should continue on with its current level of production cuts, or whether they should ease up on the production cuts by 2.0 million bpd as the group had originally planned—or some variation of these scenarios.
Most analysts suspect the group will eventually decide on a three-month extension of the current level of production cuts.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.