OPEC+ to stay put in February?

This Monday’s meeting saw OPEC+ producers, which have just started to scale back production cuts, burst into disagreement and may not reduce output cuts further next month.

The media said Russia has proposed to increase the maximum supply size by 500,000 barrels from February 2021. This would amount to, to reduce the size of the joint production cut by another 500,000 barrels per day, comparable to the size of the reduction that began in January. And most of the OPEC+ agreement cutters present are opposed to continuing the production increase in February.

Considering that OPEC+ meetings usually require consensus before coming up with a decision, this Monday’s meeting may not adopt Russia’s proposal.

Saudi Arabia’s energy minister, Prince Salman, also offered to change the 500,000 bpd production increase in January, hinting he would accept keeping the joint production cut in January until February, media said, citing delegates at the meeting. At the meeting, Salman stressed that the oil market is at risk of rising infection rates of the new crown pneumonia. Algeria, Nigeria and the UAE all supported OPEC+ to keep the January oil supply level unchanged in February.

Another media source said that most OPEC+ countries are opposed to plans for further production increases in February as the winter blockade depresses demand. The media outlet also referred to Saudi Energy Minister Al-Man’s remarks at Monday’s meeting, saying he believes OPEC+ should remain vigilant as the introduction of anti-epidemic restrictions will inevitably affect the economic recovery, despite a generally positive market environment with worryingly elevated infection rates in many parts of the country.

Russian Deputy Prime Minister and Energy Minister Novak did not publicly hint at his position, but he said at the meeting that oil markets remain highly uncertain and OPEC+ should remain flexible in its decision-making.

Investors waited for the decision day of the OPEC+ meeting, and international crude oil futures retreated intraday this Monday. Brent crude oil futures had risen above $53 during the European session, hitting a new intraday high since March 2020, the maximum intraday gain of nearly 3%, but has since gradually retracted gains, the U.S. stocks turned down in early trading, once fell below $50.80 in midday trading to refresh the daily low, down about 2% during the day. European stocks had risen nearly 2.7% in the U.S. WTI crude oil U.S. stocks fell more than 2.6% at lunchtime.