Thursday February 22, 2024

OPEC+ to meet in Vienna for the first time since 2020

October 02, 2022

By News Desk

Vienna: The OPEC+ oil cartel will meet in Vienna next week for the first time since Covid curbs were introduced in 2020, the organisation said Saturday.

Wednesday´s face-to-face meeting of the 13 OPEC members led by Saudi Arabia and its 10 allied members headed by Russia will be the first in the Austrian capital since the spring of 2020.

The gathering will take place as speculation grows of major output cuts in the face of recession fears affecting demand for crude.

Oil prices soared to almost $140 a barrel in March after Russia invaded Ukraine, but have since fallen to around $80 per barrel amid recession fears.

OPEC+ would meet physically twice a year in Vienna, but after the coronavirus pandemic, the cartel met every month by video link.

It had agreed to huge cuts in output in 2020 when the pandemic sent oil prices crashing, but began to increase production last year as the market improved.

Meanwhile, a Reuters survey found that the OPEC oil output rose in September to its highest since 2020, surpassing a pledged hike for the month, after production in Libya recovered from disruption and Gulf members boosted output under a deal with allies.

The OPEC has pumped 29.81 million barrels per day (bpd) this month, the survey found, up 210,000 bpd from August and the highest since April 2020.OPEC and its allies has been boosting output for months to unwind cuts made in 2020. But with oil prices weakening amid concern of recession, the bias shifted to cuts for October and OPEC+ looks set to tighten supply further.

"There are talks going on with some support for a cut of less than 1 million bpd," an OPEC+ source said.

Their decision for September called for a 100,000 bpd increase in the group's output target, of which about 64,000 bpd was meant to come from the 10 participating OPEC countries.

OPEC managed to over-deliver on this with a 130,000 bpd increase by participating members from August and the 210,000 bpd hike by all 13 producers, the survey found. Stil, OPEC is still pumping far less than called for. Output from the 10 members was 1.32 million bpd below the September target, versus a 1.4 million bpd shortfall in August.

Top exporter Saudi Arabia raised output by 50,000 bpd and reached its target of 11 million bpd, the survey found. Libya, one of the members exempt from OPEC output agreements, and Nigeria each boosted supply by the same volume. Libyan output recovered further from disruption and tanker-trackers noted an increase in Nigerian exports.

Output in Iraq, OPEC's second-largest producer, was little changed, and the United Arab Emirates and Kuwait increased supply in line with their targets. There were no significant declines in output during September, the survey found.