Adedapo Adesanya
By Adedapo Adesanya
Brent crude benchmark dipped below $80 a barrel on Monday, precisely losing 60 cents of 0.7 per cent to trade at $79.98 a barrel as investors await this week’s meeting of the Organisation of the Petroleum Exporting Countries and their allies (OPEC+).
The group is anticipated to maintain its ceiling on crude oil production by member countries into 2024.
This affected the oil market, with the West Texas Intermediate (WTI) crude futures declining yesterday by 68 cents or 0.9 per cent to trade at $74.86 per barrel.
Last week, the 23-man OPEC+ postponed its Sunday ministerial meeting to Thursday, November 30, to iron out differences on production targets for African producers.
There have been reports that Saudi Arabia wants African producers like Nigeria and Angola to reduce their production targets so they can also participate more in the cuts that account for around 5 per cent of global outputs that were instituted last year.
Reuters reported that OPEC+ is looking at deepening oil production cuts despite its policy meeting being postponed to this Thursday in order to support prices.
An OPEC member, Kuwait, through its oil ministry, said in a post on social media platform X that it was committed to any decision by OPEC, especially those that concern market quotas and oil production.
At the same time, for next year, the United Arab Emirates (UAE) is set to increase exports of its flagship Murban crude grade after negotiating a higher production quota in the OPEC+ deal.
For years, the UAE has argued it should be allowed to pump more than its current OPEC+ quota as it is raising its production capacity. At the June meeting, the UAE won an upward revision of its quota that will take its production up by 200,000 barrels per day to 3.219 million barrels per day for 2024.
On Thursday at 1300 GMT, ministers on an advisory panel called the Joint Ministerial Monitoring Committee (JMMC) hold talks. This will be followed at 1400 GMT by a meeting of the full policy-making group of OPEC+ ministers.
Analysts from ING said they expected Saudi Arabia to roll over its additional voluntary cut of 1 million barrels per day into next year, and Russia to extend its own cuts.
The International Energy Agency (IEA) said it expects a slight surplus in global oil markets in 2024 even if OPEC+ nations extend their cuts into next year.
Higher crude stockpiles in the United States have also put downward pressure on prices, analysts said.
In the geopolitical scene, Qatar, which is acting as a mediator, on Monday said a truce between Israeli and Hamas forces in Gaza had been extended by two days, continuing a pause in seven weeks of warfare.
The Middle East crisis had impacted oil prices as investors worried about impacts on supply, which has no effect yet.
