Russian Energy Minister Alexander Novak on October 20 said that it was now too early to talk about OPEC+ future policy beyond 2020. He said that OPEC+ would need to assess the market development before making any decision. Several days earlier, Novak said that the alliance’s plans to ease supply curbs in January should proceed. OPEC+ producers are due to meet on November 30-December 1.
Despite Novak’s statement, Russia will likely support a rollover of the current production cuts beyond December, Reuters reported, citing industry sources. President Putin and Saudi Arabia’s crown prince Mohammed bin Salman have intensified telephone calls last week, which Kremlin spokesman said necessary amid volatile markets.
OPEC+ has been curbing crude production since January 2017 to support prices and reduce a supply glut. For now, these producers are cutting output by 7.7 million bpd after slashing 9.7 million bpd on May 1 through August 1. They plan to relax the supply reduction by 2 million bpd beginning in January 2021.
However, resurging COVID-19 infections and the return of Libyan supplies may threaten OPEC+ next year plans. Analysts at JP Morgan have said a discouraging demand outlook could force OPEC+ to delay the planned production boost. Reuters reported that OPEC+ Joint Technical Committee considered some scenarios, including one that projects a surplus of 200,000 bpd in 2021.
