With an all-important higher-level meeting around the corner, the Algerian Energy Minister Mr. Abdelmadjid Attar has suggested that OPEC+, the global body of major crude oil-producing economies, could consider extending or even increasing the current production cuts well into 2021.
The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia form the body called OPEC+ with Saudi Arabia and Russia playing major roles to push policies.
There has been some internal resistance among a few of the OPEC members like UAE who wanted to increase the production to support its dwindling economy still majorly supported by crude oil.
The body is expected to reduce its existing cuts of 7.7 million barrels per day (BPD) by about 2 million BPD in January.
Algerian Energy Minister stated that ” I can assure you that OPEC remains committed to taking appropriate actions, in cooperation with its partners in the Declaration of Cooperation, in a manner that is proactive and effective.”
“This includes the possibility of extending today’s production adjustments into 2021, as well as deepening these adjustments, should market conditions require,” Mr. Attar added.
Last week, the Algerian Energy Minister did state that Algeria, which currently holds the OPEC presidency will support an extension of the current cuts into next year while adding that the next OPEC+ gathering could consider a longer six-month extension.
An extension until the end of March is also reportedly being considered as an option among the members. Earlier this week, OPEC revised its 2021 oil demand growth outlook as COVID infections rose again.
The revised outlook expects the demand to rise by 6.25 million BPD next year to touch a total volume of 96.26 million BPD, 300,000 BPD lesser than its outlook last month.
Rising Libyan production after the peace deal is also a challenge the body has to tackle in the short term.
With the higher level ministerial meeting scheduled to happen on November 17, OPEC+ is expected to have a larger gathering to reveal its policy for the next quarter on November 30 and December 1.