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OPEC will very likely agree to cut oil production at its upcoming meeting in early December, although the size of the cuts is yet to be decided, Ahmed al-Kaabi, Governor for OPEC of the United Arab Emirates (UAE), told the local Al Bayan newspaper on Tuesday.
The OPEC-Non-OPEC Joint Ministerial Monitoring Committee (JMMC) is still assessing the state of the oil market and will share with the group its findings before the meeting in Vienna on December 6-7, al-Kaabi added.
The UAE is committed to comply with any decision of OPEC, the official noted.
Two weeks before the meeting of the OPEC and non-OPEC partners, speculation has intensified that the cartel and its de facto leader Saudi Arabia may be willing to make another U-turn in oil production policy and decide to cut production next year, just months after increasing output to offset expected losses from Iran and Venezuela.
While Saudi Arabia says that there may be a need of cutting oil production by 1 million bpd, Russia—the leader of the non-OPEC partners in the deal—looks more non-committal, at least for the time being. Last week, reports emerged that Russia may prefer to stay out of any fresh oil production cuts.
Russia’s only hints to the market so far are that it is discussing potential oil production cuts with local producers and will continue talks to come up with a position by the December meeting, as Russian Energy Minister Alexander Novak said on Monday.
Despite the flurry of various reports from many sides within the cartel that an OPEC cut is in the making, oil prices plunged on Tuesday morning, depressed by the stock market sell-off and renewed concerns about oil oversupply. WTI Crude was plunging 5.24 percent at $54.20, while Brent Crude was plummeting 4.15 percent at $64.02 at 10:22 a.m. EST.
By Tsvetana Paraskova for Oilprice.com