The Organization of the Petroleum Exporting Countries (OPEC), which includes 13 countries, is set to meet online at 1300 GMT. Among other things, OPEC+ will be discussing its existing agreement of supplying 400,000 barrels per day of oil to the market in November which was announced in July this year. An OPEC+ ministerial panel that monitors market developments, known as the Joint Ministerial Monitoring Committee, is scheduled to meet just before that.
According to Reuters, OPEC and its allies are expected to stick to their existing agreement to add 400,000 barrels per day (bpd) of oil to the market in November, as per three OPEC+ sources, albeit the consumer pressure which calls for more oil supply to the market as the economy kickstarts and demands rise in the backdrop of the COVID-19 pandemic.
“The most reasonable is to add 400,000 barrels per day, no more,” said one of the sources to Reuters, hinting that the ministers were unlikely to change the output policy they had decided on. Another source left more margin for an increase but asserted that 400,000 bpd would be the probable outcome of the discussion.
Due to supply disruption amid a rise in global demand, the oil prices had surged to over $80 a barrel last month, close to a three-year high, while it cooled down to $79 on Monday before the gathering is set to take place.
Morgan Stanley, an American multinational investment bank and financial services company stated their conjecture on the topic. “Our base case expectations for today’s OPEC meeting is that OPEC continues with its existing agreement to unwind its production cuts by around 400,000 bpd each month,” Morgan Stanley said in a note. “However if there is a reason to do so faster, it is because OPEC’s own oil consumption is also recovering at a rapid pace,” the note added.
Benchmark Brent crude, which had risen over 50 per cent this year due to the COVID-19 pandemic, was down 6 cents or 0.1 per cent at $79.22 per barrel by 0935 GMT on October 4 whereas it had risen 1.5 per cent the week prior, it’s fourth weekly gain in a row. Meanwhile, U.S. oil dropped by 13 cents or 0.2 per cent to $75.75, after increasing for the past six weeks.