Date: 30 November 2020

OPEC+ Stutters Over Oil Cut Deal, Russia’s Sechin Forecasts Oil Prices

There are discrepancies over the situation on the energy market and forecasts for the next year, according to crude oil producers. This delayed the OPEC+ decision on what actions to perform throughout Q1 2021.


Members of the 23-country oil-producing cartel were at odds while trying to strike a deal on further oil output cuts. The December 1 ministerial assembly coalition was therefore canceled and rescheduled to December 3. On November 29, oil ministers from the world’s largest fossil-fuel nations met via webcam yet failed to reach a deal over the January delay to crude output hike. Most countries are in favor of keeping the cuts as they are now also in Q1 2021. Nonetheless, some OPEC+ nations like the United Arab Emirates and Kazakhstan would like to produce more oil. If OPEC+ decides to boost supplies starting from early 2021, the market will see a daily increase of 1.9 million barrels of oil. Meanwhile, on November 29, Igor Sechin gave an interview for a prestigious TV broadcast titled Moscow. Kremlin. Putin in the country’s state TV channel Rossiya-1. The CEO of Rosneft said two key factors would further shape crude oil prices. According to what he said, Sechin still expresses skepticism over the OPEC+ formula. Although he admitted much would depend on market participants and their coordinated actions, the price depends mostly on what he named as the “consumption level.” Sechin maintained that even the Chinese market was already showing both economic growth and recovering demand for crude. “We supply 60 million tons of crude oil to consumers across China every year,” he added. Indeed, the demand for crude oil has risen noticeably in recent weeks. This gives grounds to believe that demand will stay at a high level in Q4 at least throughout the region. In its November short-term energy outlook, the U.S. government agency EIA said the reduction in 2021 stocks would exert a positive impact on the energy market. Brent is expected to average $47 a barrel in 2021. Asked by Reuters, market observers forecast Brent would stand at $49.76 a barrel next year.

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