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Monday, January 24, 2022

Oil Prices Lower as ‘Difficult’ OPEC Meeting Looms

Oil Prices Lower as ‘Difficult’ OPEC Meeting Looms© Reuters. Oil trades lower while producers discuss changes to output

Investing.com – Oil prices saw mixed signs in midmorning trade on Tuesday as disagreements among major producers over output curbs continued ahead of a key meeting in Vienna on Thursday and Friday.

New York-traded fell 72 cents, or about 1.1%, to $64.97 a barrel by 10:22AM ET (14:22GMT).

Meanwhile, , the benchmark for oil prices outside the U.S., traded down 15 cents, or 0.2%, to $75.19.

Oil ministers from OPEC, Russia and other major producing countries will meet in Vienna on Thursday and Friday to review their current production agreement that has held back 1.8 million bpd from the market for the past 18 months.

, recouping earlier losses on the back of reports that the Organization of the Petroleum Exporting Countries’ (OPEC) along with Russia were discussing a smaller-than-expected increase in production.

According to people briefed on the talks, OPEC will discuss an oil output hike of 300,000 to 600,000 barrels per day (bpd) at this week’s meeting, as it seeks to bridge the gap between Russia’s push for a big rise and Iran’s insistence that no change is needed.

Last month, it was reported that OPEC and Russia were aiming to boost output by at least 1 million bpd at the June meeting.

However, disagreements between producers have continued. from July to meet growing demand amid opposition from other producers including OPEC members Iran, Iraq, Venezuela and Algeria.

On Monday, Ecuador’s oil minister Carlos Perez predicted a difficult OPEC meeting. “There are other countries that do not want to reduce the cuts. It’s going to be a difficult … a tough meeting,” Perez said.

Russian energy minister Alexander Novak warned reporters on Tuesday that oil demand tends to pick up the pace in the third quarter and producers could face a deficit without action.

Novak said he wanted OPEC and non-OPEC to raise output by 1.5 million barrels per day (bpd).

The Russian energy minister explained that if a decision were taken this week to raise output, OPEC and its allies could meet again in September to review the impact and fine-tune production policy.

That being said, one OPEC source told Reuters that the Saudi-Russian proposal of a 1.5 million bpd increase was “just a tactic” aimed at persuading fellow members to compromise on a smaller rise of around 500,000-700,000 bpd.

In other energy trading, lost 0.4% $2.0455 a gallon by 10:24AM ET (14:24GMT), while also fell 0.5% to $2.1220 a gallon.

Lastly, traded down 1.7% to $2.901 per million British thermal units.

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Source: Investing.com

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