by Ahmad Ghaddar, Alex Lawler and Maha El Dahan
LONDON (Reuters) – OPEC and its allies began a series of two-day meetings on Saturday that could lead to a further cut in their production of around a million barrels per day (bpd), said sources tell Reuters as the organization faces falling oil prices and a potential oversupply.
OPEC+, which brings together the Organization of the Petroleum Exporting Countries and their allies led by Russia, produces around 40% of the world’s crude. His decisions therefore have a major impact on oil prices, which have fallen to around 70 dollars a barrel.
According to the sources, the pumping cuts are among the options to be debated on Sunday, at the organization’s ministerial meeting at 2:00 p.m. (1200 GMT) in Vienna.
These reductions could amount to one million bpd.
OPEC+ already announced new production cuts at the beginning of April for a total volume of around 1.6 million bpd, in addition to a production cut of two million bpd decided last October for the November 2022 period. at the end of 2023.
If approved, this additional cut would bring the total volume of OPEC+ production cuts to 4.6 million bpd, or 4.5% of global demand.
“This figure is premature, we have not yet addressed these issues,” Iraqi Oil Minister Hayan Abdel-Ghani told reporters on Saturday, when asked about a possible reduction of one million bpd.
Usually, OPEC+ decisions on production cuts take effect the month after they are announced, but ministers can also agree to later implementation.
Western countries accuse OPEC+ of manipulating crude oil prices and weighing on economic activity through high energy prices.
OPEC officials respond that the monetary easing decided by most Western countries during the past decade has fueled inflation and forced oil-producing countries to act to preserve the value of their main export good.
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“We look forward to a resolution that will sustainably ensure the balance between supply and demand,” said UAE Energy Minister Suhail Al Mazroui.
The ministers, who met at 11 a.m., spoke to the press from their hotels in Vienna as OPEC refused access to its headquarters to journalists from Reuters and other media.
The surprise announcement in April caused only a brief rise in the price of a barrel, with questions about the outlook for global growth continuing to weigh on prices.
The barrel of Brent was displayed on Friday at 76 dollars.
The International Energy Agency expects global demand to increase further in the second half of 2023, which could support crude prices.
JP Morgan analysts, however, say there is “simply too much supply” given US shale oil production and higher-than-expected Russian exports.
(Report Ahmad Ghaddar, Alex Lawler, Maha El Dahan and Julia Payne; written by Dmitry Zhdannikov; French version Claude Chendjou and Jean-Stéphane Brosse)
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