OPEC and its allies are likely to stick to their plan to increase crude oil output by 400,000 b/d next month, even if key consuming countries release barrels from their strategic reserves, though a looming oversupply in the first quarter will bear watching, UAE energy minister Suhail al-Mazrouei said Nov. 23.
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"I don't think we are changing the plan," Mazrouei told reporters at the Expo 2020 in Dubai. "As of now, we are going to meet on the 2nd [and] we will look at the facts, we will look at the volumes in the market, and we will take the decision based on those facts."
The OPEC+ alliance is scheduled to meet Dec. 2 to decide on January production levels, amid strong hints from the US, China, Japan and India that a coordinated crude release from their strategic petroleum reserves was imminent.
The speculation over the release has contributed to Dated Brent briefly falling below $80/b, after hitting three-year highs above $85/b in late October. S&P Global Platts assessed the benchmark at $81.11/b on Nov. 22.
Some OPEC+ delegates had told S&P Global Platts that the producer bloc could reassess its options if the SPR draws cause the market to be oversupplied. A further ratcheting of coronavirus lockdown measures in Europe may also prompt the OPEC+ alliance to delay or withhold its planned production increases, sources have said.
The US, Japan and India had publicly lobbied OPEC+ ministers to go beyond their planned monthly 400,000 b/d production increases to cool off a surging market that they said was endangering the global recovery from the pandemic.
But the OPEC+ alliance has so far rebuffed those requests, citing several forecasts, including from the International Energy Agency and the US Energy Information Administration, that the market would tip from deficit to surplus by January.
"We are meeting as planned," Mazrouei said. "We are looking at all of the technical data, and all of them are suggesting that we will have a surplus in the first quarter, so there is no logic in increasing our contribution."
He said any planned SPR releases were "a state matter, and they don't consult with us when they increase the SPR or they decrease it."