OPEC and allies led by Russia have yet to find a consensus on oil output policy for 2021, after an initial round of talks on Sunday and ahead of crucial meetings on Monday and Tuesday, four OPEC+ sources told Reuters.
There was support in delaying the hike but there was no widespread agreement between members. Therefore, as it currently stands, output will be increased by 1.9m barrels a day in January.
key notes
''OPEC+, a grouping comprising members of the of Organization of the Petroleum Exporting Countries, plus Russia and others, had been due to ease production cuts from January 2021, but a second coronavirus wave has reduced demand for fuel around the world.''
''OPEC+ is now considering rolling over existing cuts of 7.7 million barrels per day, or around 8% of global demand, into the first months of 2021, sources have said.''
''Preliminary consultations on Sunday between the key ministers, including from OPEC's leader Saudi Arabia and Russia, had not reached a compromise on the duration of the rollover.''
''Sources have said talks were now focusing on extending cuts by three to four months, or on a gradual increase in output. Ideas of deeper cuts or a six-month rollover were much less likely, the sources said.''
"There is no consensus as yet," one of the four sources said.
A second source said: "There are many different ideas on the table... Also, a gradual increase (in production)."
The main meeting was expected to begin at 1300 GMT on Monday.
Market implications
It is 'wait-and-see-mode' for oil markets in anticipation of the continuation of talks this week.
''Brent spreads narrowly moved into backwardation, implying the market has discounted the near-term deficits that are likely to materialize with an OPEC+ tapering delay, combined with a continued recovery in demand. This fits well with our expectations, suggesting that the market has fully discounted a likely OPEC+ tapering delay,'' analysts at TD Securities noted last week ahead of the meetings.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.