Vienna, June 1 (.).- OPEC+, an alliance of 22 ‘petrostates’ led by Saudi Arabia and Russia, will hold its semiannual meeting this Sunday to set the level of crude oil supply in the coming months, amidst expectations to keep pumping severely curtailed.
According to sources close to the Organization of Petroleum Exporting Countries (OPEC) in Vienna, several ministers will travel to Riyadh to attend the meeting, while others will participate electronically.
The 37th OPEC+ ministerial conference, which was initially scheduled for this Saturday in Vienna and which a few days ago was changed to a virtual format on June 2, was still announced today as a “teleconference” on the organization’s official website.
Be that as it may, the meeting will be preceded by the 188th regular conference of the 12 OPEC partners and an internal committee of the alliance.
The marked downward trend in oil prices, which on Friday ended May with the biggest monthly drop of the year, will weigh on the debates at these meetings of ministers of the sector and analysts hope that they will decide to extend the strong pumping cuts agreed upon in several batches from October 2022.
On the one hand, there are binding reductions that, for a total of 3.66 million barrels per day (mbd), are in effect until the end of this year.
Until June 30, another 2.2 mbd are added in the form of additional and voluntary cuts from several countries.
Venezuela, Iran and Libya are exempt from all these commitments due to sanctions and conflicts that already limit their oil activity.
In April, these three OPEC partners together pumped 5.2 billion barrels per day (mbd), while the production of the remaining 19 totaled 35.82 mbd, almost 19% less than the level of extraction they had two years ago.
Analysts expect that tomorrow, at least, an extension of the voluntary cuts will be announced until December 31.
However, its objective of making ‘black gold’ more expensive has only had a partial effect, since a good part of the almost 6 mbd (equivalent to almost 6% of global crude oil demand) that the alliance has withdrawn from the market has been replaced by barrels from outside the group.
Above all, the United States, Canada, Brazil and Norway have increased the volumes of crude oil extraction and exports, according to the latest OPEC report.
The oil alliance thus faces a dilemma, since by cutting its supply it loses share in the world market and with this its influence on the evolution of barrel prices is also reduced.
Oil prices ended lower on Friday: a barrel of oil remained at $81.62, 0.29% less than at the close of Thursday, while that of Texas Intermediate (WTI) fell 1.2%, to $76.99. Both thus closed the month of May with losses of more than 6% compared to the end of April.
