may impose Oil producers from OPEC and outside Greater cuts in oil production during their scheduled meeting today, Sunday, in order to limit the effects of tightening sanctions once morest Russia on the markets, including the European Union’s decision to impose a ceiling on prices.
The “OPEC +” alliance, which includes a group of 23 oil producing countries, is scheduled to meet to decide on the next phase of production policy.
According to a report by the American network “CNBC”, seen by “Al Arabiya Net”, the upcoming meeting of the “OPEC +” alliance comes before the imposition of large possible additional sanctions on Russian oil, which weakens the demand for crude in China and escalates fears of a recession.
Claudio Gallimberti, senior vice president of analysis at energy consulting firm Rystad, said he believed the OPEC+ group “would be better off staying the course” and changing the current production policy.
Gallimberti pointed out that rumors have recently spoken that OPEC + may reconsider the current cut in production due to recent economic developments, specifically in China, “however, traffic in China at the national level has not decreased significantly,” as he put it, which means excluding The validity of these rumors.
CNBC says energy market participants remain concerned regarding European Union sanctions on purchases of Russia’s crude exports, while capping Russian oil prices for the Group of Seven is another source of uncertainty in the markets.
The 27-nation European Union agreed last June to ban the purchase of Russian seaborne crude starting from December 5, 2022, as part of a concerted effort to reduce financial imports to the Kremlin in the wake of Moscow’s invasion of Ukraine.
However, concern that a total ban on Russian crude imports might lead to higher oil prices prompted the Group of Seven major industrialized nations to consider capping the amount they would pay for Russian oil.
EU governments agreed to cap the price of seaborne Russian oil at $60 a barrel.
Gallimberti said: “The other factor that OPEC has to take into account is already the price ceiling .. It is still in the air, and this increases the uncertainty.”
OPEC + agreed in early October to cut production by two million barrels per day, starting in November.
A few days ago, Helmi Croft of (RBC Capital Markets) said that there are no expectations of an increase in production during the “OPEC +” meeting scheduled for Sunday, with a “high chance” for a further reduction in production.
Croft added, “There is a lot of uncertainty,” noting that the “OPEC +” delegates must take into account what is happening with China, but also what is happening with Russian production.
Tamas Varga, an analyst at PVM Oil brokerage, said that trading oil prices below $90 a barrel is “unacceptable” for “OPEC +”, and that Russia is widely expected to take retaliatory measures once morest those who signed the agreement. Group of Seven agreement.
He added, “Volatile and nervous market conditions will prevail, but the new month should bring more happiness compared to November.”
Jeff Currie, global head of commodities at Goldman Sachs, said OPEC+ ministers would need to discuss whether to absorb further weakness in demand in China.
He added, “They have to deal with the fact that demand is declining in China, and prices reflect it, and do they adapt to this weakness in demand?” “I think there is a high probability that we will see a reduction,” he added.
