After two weeks of uncertainty, the OPEC+ is finally
meeting on Sunday, the group announced yesterday.
The bone of contention between the UAE and Russia
that delayed the last meeting was the insistence of the UAE on increasing its
baseline from 3.2 million bpd to 3.8 million bpd.
If agreed, the UAE was prepared to toe the line of
the OPEC+ with an increase in daily production – 400,000 bpd - from August to
December 2021 and extend the capping of the output beyond April, 2022 up until
December, 2022.
After intense discussions between the two Middle
Eastern neighbours, perhaps, with the collective mediation of the US and Russia
as a catalyst, the two sides may have reached an agreement.
The UAE may have won a partial victory over its
ambition to raise the baseline.
Whatever the outcome on the major issue, the output
level will be increased by the OPEC+, sensing the mood of its customers across
the globe at a very difficult time.
The reaction of the oil markets at the developing
story remains to be seen, because the volatility is unpredictably high at
present.
