OPEC+ seen heading for oil policy rollover, cut not ruled out

By Ahmad Ghaddar, Maha El Dahan and Alex Lawler

LONDON/DUBAI (Reuters) – OPEC+ is likely to stick to its current oil output target when it meets on Sunday, two OPEC+ sources said on Friday, although some say a further output cut is not completely off the table given concern about economic growth and demand.

The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, a group known as OPEC+, has switched its planned in-person meeting in Vienna on Dec. 4 to a virtual one, which sources in the group say signals the likelihood of it leaving policy unchanged.

“It is unlikely there will be any change to the policy,” an OPEC+ source said. Another source made similar remarks, also declining to be identified by name.

Talks begin on Saturday when OPEC ministers hold a virtual meeting at 1100 GMT. OPEC+ begins talks at the same time on Sunday with a meeting of the advisory Joint Ministerial Monitoring Committee (JMMC) panel, followed by the full ministerial conference.

With oil prices and the economic outlook weakening, the group agreed in October to cut its production target by 2 million barrels per day (bpd), about 2% of world demand, from November until the end of 2023.

OPEC+, sources told Reuters, now wants to assess the impact of the looming Russian oil price cap on the market and get a clearer picture of demand in China, the world’s top crude importer, where an easing of stringent COVID-19 restrictions is expected after unprecedented demonstrations.

The chief executive of Kuwait Petroleum Corporation, Sheikh Nawaf Saud al-Sabah, said on Friday the oil market appeared to be well supplied at current levels and customers were not asking for more oil.

“We are asking our customers what they require for next year and the straight answer from all of them is we are not requiring more oil, we are actually demanding about the same, perhaps even less, just because of a fear of recession … although now we may avoid it,” he said at a conference in Rome.

Some OPEC+ delegates and analysts are not ruling out a surprise at Sunday’s meeting.

JPMorgan, in a report this week, said OPEC+ was likely to hold the line at the meeting while leaving the door open to a cut of more than 500,000 bpd if demand deteriorates further.

(Reporting by Alex Lawler, Maha El Dahan, Ahmad Ghaddar and Rowena Edwards; Editing by Mark Potter)