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The Joint Technical Committee (JTC) at OPEC, the body that reviews oil market fundamentals before the cartel’s ministers gather to discuss cuts, will meet in Vienna on the afternoon of December 3, a source at OPEC told Reuters on Tuesday.
The full OPEC meeting is scheduled in Vienna on December 5, while the non-OPEC partners in the production cut deal, led by Russia, will join the talks on the following day, to decide how to proceed with the pact.
The market expects a concrete decision from the OPEC+ group next week, be it rolling over the current cuts through June or deepening them. Analysts concur that a failure to communicate to the market a decision to act next week would send oil prices down.
The partners may roll over the current cuts into June 2020, as Russia will likely support the cartel’s efforts to raise the price of oil, Reuters reported last week, citing OPEC sources and delegates.
Currently, the partners in the deal have two main scenarios to discuss—either roll over the cuts through June next year, or postpone a decision on the deal until early 2020, before the current cuts expire in March and again, roll over the production restrictions until June.
According to an OPEC delegate who spoke to Reuters, the partners are more likely to extend the cuts in December to avoid meeting again before the current deal expires in March 2020.
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Russia is still non-committal, as it has been ahead of all previous such meetings, before agreeing to a rollover of the deal. But Russian President Vladimir Putin said last week that Moscow and OPEC have “a common goal” to keep the oil market balanced, and that Russia would continue to cooperate with the cartel to keep the market stable.
The strength in oil prices in recent days “to reflects growing expectations that OPEC+ will agree to make deeper cuts, as well as extend the deal until mid-2020 at their meeting next week,” Warren Patterson, ING’s Head of Commodities Strategy and Senior Commodities Strategist Wenyu Yao, said on Tuesday.
“It is important to point out that this expectation is also a key downside risk, if OPEC+ fail to act,” ING’s strategists noted.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.