The meeting of the members of the OPEC+, scheduled to be held on December 1, had been postponed at the eleventh hour, citing the participation of some members at the GCC, Gulf Corporation Council that was held on the same day in Kuwait. The next meeting, along with that of the JMMC, Joint Ministerial Monitoring Committee, will be held on December, 5, according to the OPEC+. The OPEC+ is supposed to outline their next move with regard to easing of the production cuts; OPEC+, a few months ago, said it would take place in December, having postponed in light of falling oil prices, on two occasions. Reaching an agreement over the production cuts is not the only issue that the OPEC+ has been grappling with for years: even if the individual member is assigned a quota, more often than not, the member in question tends to overproduce or fails to reach the target due to infrastructure issues, especially in Africa; as for the former, those who violate have been forced to compensate for the overproduction by performing the obvious – cutting down on production to meet the imposed targets; this form of control by the more dominant members of the cartel, often leads to acrimonious disagreements. The departure of Angola from the alliance is a case in point. That, however, is not the end of the story.
The analysts at S&P Global disclosed last week that the UAE has been exceeding the production by 700,000 barrels more than what it agreed to, with the OPEC+, from January to October.; it is well in excess of the quota, indeed. The UAE has been vocal in asking for higher quotes, though, succeeding partially. Russia and Saudi Arabia, meanwhile, want to cut down on production in order to boost the falling prices. As for Saudi Arabia, the current break-even price is higher than the oil price of crude at present. The production cost for the UAE, however, is much lower than that of Saudi Arabia, the de facto leader of the OPEC+. It goes without saying that low production means loss of revenue; this is the lingering, major issue for the oil producers. It is an acute problem for the countries that completely rely on the revenue from oil to boost their coffers. In light of these developments, Prince Mohammad bin Salman, the Crown Prince of Saudi Arabia, suddenly decided to meet the president of the UAE on what has been described as a private visit. The outcome of the meeting has not been disclosed, leaving it open to various interpretations. Against this backdrop, analysts in the energy markets are keenly following the precursors as well as the proceedings of the forthcoming OPEC+ meeting that is scheduled for 5 December.
As of 13:45 GMT, the prices of WTI and Brent, meanwhile were at $68.99 and $72.79 respectively. The price of LNG, liquified natural gas, was at $3.18.
