Argus Media Limited

11/25/2021 | News release | Distributed by Public on 11/25/2021 05:03

Kuwait, UAE yet to decide position for next Opec+ meet

Mideast Gulf crude producers Kuwait and the UAE have said they will not take a position on Opec+ policy before the group meets next week, when the producer group will decide if it should respond to this week's US-led co-ordinated release of crude from strategic reserves.

"The UAE is fully committed to the Opec+ declaration of co-operation agreement… and there is no prior position regarding the next meeting," the ministry of energy said in a statement released earlier today on state-run WAM news agency. Kuwait's oil minister Muhammad al-Fares said the country is "open about the consultations to be held" in next week's meeting, and it "has yet to adopt a specific stance" on what the Opec+ group's next steps should be.

Opec and its non-Opec partners, known collectively as Opec+, will meet next week to determine oil production policy for January - specifically whether there is a need to deviate from the plan to gradually restore the production it removed from the market in monthly 400,000 b/d increments. The group stuck to this at its meeting on 4 November in the face of calls from key consumer countries the US, India and Japan for it to consider raising its production faster and more aggressively than planned to help cool rising oil prices.

As of last week, several Opec+ ministers were suggesting the group would probably stick with the plan and sanction another 400,000 b/d output rise, citing the fundamentals.

"We have been receiving calls from many countries regarding the pace [of the returning output]," al-Mazrouei said at the time. "But this is not the decision of one country. This is a decision of 20-plus countries. We need to be convincing. And the only way of being convincing is to use the data."

This week's co-ordinated strategic reserves release by the US, China, India, South Korea, Japan and the UK may change the calculus, but the Iraqi oil ministry today said the action will not have a big effect in the short term. This echoed what several Opec+ delegate sources told Argus shortly after the announcement, that there may not be a need to deviate from the plan.

"I do not see red flags that may pressure Opec+ to stop its release plan as agreed before," one said, and a second said although the group could respond, it would probably not come at next week's meeting. A third delegate said Opec+ would "act, as always, to keep the market balance," but said the group would first have to determine whether the crude released from the reserves would be exported or added to commercial stocks of the issuing countries.

An Opec+ technical committee that studies market conditions is scheduled to meet on 29 November. That will be followed by a meeting of the Joint Ministerial Monitoring Committee (JMMC) on 30 November. Opec ministers will then meet on 1 December, followed by a full meeting of Opec and non-Opec ministers on 2 December.

By Nader Itayim, Ruxandra Iordache and Rowena Edwards