On Friday evening Beijing time, the international benchmark oil price rapidly rose, with a short-term increase of nearly 1%. Due to reports that OPEC+and African oil producing countries are reportedly reaching a compromise on approaching production levels in 2024.
Previously, due to Saudi Arabia's dissatisfaction with the production levels of other member countries, negotiations were deadlocked. OPEC+postponed the meeting originally scheduled for Sunday to November 30th, which will be their first formal ministerial meeting since early June. And it is quite rare that the meeting on November 30th was changed to be held online.
In the past two months, with sufficient supply and a bleak economic background, international crude oil prices have fallen by 15%, putting pressure on OPEC+to further reduce production.
According to sources, he has "99% confidence" that OPEC+may reach an agreement on November 30th. Two sources also stated that an agreement is about to be reached. Another source stated that negotiations are still ongoing.
Gabriel Tanimu Aduda, Executive Secretary of the Nigerian Ministry of Petroleum and Resources, stated on Thursday that he is unaware of any differences between Nigeria and OPEC+other member countries regarding the domestic production target.
Previous reports have shown that Nigeria and Angola refuse to accept lower production quotas, and there are even rumors that Angola is considering withdrawing from OPEC+.
Due to years of failure to meet the set production targets, African countries such as Nigeria and Angola were forced to accept lower production quotas for 2024 at the last OPEC+meeting in June this year.
As of October, according to independent sources cited by OPEC, Angola's production is still below the quota for 2024. Nigeria's production is 1.38 million barrels per day, close to but still below the 2024 quota of 1.58 million barrels per day assessed by independent sources.
Several analysts have stated that they expect OPEC+to extend or even deepen next year's oil supply cuts to support prices. The market is also watching whether Saudi Arabia will extend its additional voluntary production reduction of 1 million barrels per day, which was originally scheduled to expire at the end of December.
The convening of this OPEC+meeting will take place more than seven weeks after the outbreak of the Israeli Palestinian conflict. This war once led to a brief rise in oil prices, against the backdrop of a higher risk of conflict spreading in the oil rich Middle East region.
Independent energy expert Anas Alhajji commented that as the date for OPEC+to make the next major decision approaches, it will be difficult for the organization to agree to a new round of production cuts "without an economic recession". He said that even in an economic recession, reducing production is not to increase oil prices, but to "prevent further decline in oil prices.".
Jorge Leon, Senior Vice President of Oil Market Research at Rystad Energy, said, "OPEC always has to make a trade-off between market share and price." He said that historically, OPEC+has always focused on price and is likely to continue to do so.
"If only Saudi Arabia extends the voluntary production reduction agreement, oil prices may fall in the short term," said Carsten Fritsch, an analyst at Commerzbank in Germany