London, March 4 (AFP/APP): The OPEC group of oil producers and its allies meet Thursday with all eyes on whether powerhouses Russia and Saudi Arabia can agree on output levels following a rebound in demand and prices.
While the so-called OPEC+ group is often at loggerheads over how much oil to pump into the market, a sudden plunge in prices triggered by the coronavirus pandemic early last year led members to agree on a dramatic cut in output to underpin prices.
Now that vaccination campaigns are underway and demand from China, the world’s largest oil importer, has bounced back to pre-pandemic levels, the group is expected to raise output. But the success of the meeting on Thursday will hinge on whether heavyweights Russia and Saudi Arabia can agree on a way forward.
“There is within the alliance a major difference of opinion on the capacity of the oil market to absorb new volumes” of crude, said Bjarne Schieldrop, chief commodities analyst at SEB research group.
The world’s second-largest crude producer after the United States, Russia “leans for caution”, Schieldrop explained, while number three, Saudi Arabia, “defends the increase in supply”. Russian Deputy Prime Minister Alexander Novak said on state-run Russian media that “the situation is much better than a year ago and this fall”, but he warned that “many uncertainties and risks remain”.
On the sidelines of a technical meeting Tuesday, the head of OPEC, Mohammed Barkindo, pushed for the middle ground when he said the cartel must emphasise “cautious optimism” given persistent risks from the pandemic.
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