By Charles Kennedy of OilPrice.com
The OPEC+ group has made progress in talks with its African producers over their oil output quotas next year, three OPEC+ sources told Reuters on Friday, after the alliance had to postpone this weekend’s meeting over the spat.
On Wednesday, OPEC said that the OPEC+ meeting scheduled for this weekend would be postponed to November 30, which sent oil prices tumbling over fears of disagreements in the group about the next move in its oil production policy.
OPEC’s African members Angola and Nigeria have reportedly asked to have a higher production ceiling next year, after taking a cut in their quotas at the June 2023 meeting of OPEC+ as they had consistently failed to pump to their quotas.
Angola, Congo and Nigeria were forced to commit to lower oil production in 2024, and the originally scheduled November 26 meeting could potentially have pressured them to make further production cuts, as the Saudis express discontent over compliance with the deal as it shoulders the bulk of the burden, according to reports this week.
Before the announcement of a delay in the meeting, which will be held online next week, most analysts had expected that OPEC’s top producer, Saudi Arabia, would extend its voluntary cut of 1 million barrels per day (bpd) into 2024, considering the latest slide in oil prices to $80 and the typically weak period for oil demand in the first quarter of every year. Market talk was also intensifying that OPEC+ could announce a deeper cut.
OPEC+ will likely reach an agreement at the meeting next week, one of Reuters’ sources said on Friday, feeling “with 99% of confidence” there would be a deal.
Two other sources told Reuters that the group was close to reaching a compromise with the African producers on the levels of their crude oil production next year.