A lot will depend on where prices are when the group meets, according to Ann-Louise Hittle, the Vice President of Oil Markets at Wood Mackenzie.
“The recent price decline in the wake of the SVB developments is likely temporary unless the U.S. economy goes into recession and drags global economic growth slower than our outlook for a 2.2 percent gain in global GDP for 2023,” Hittle told Rigzone.
‘If prices remain in the $70s per barrel at the time of the next OPEC+ meeting, the group would be inclined to consider an additional production cut’.
“Based on that economic outlook, we forecast total liquids demand for 2023 to increase by 2.5 million barrels per day year-on-year. That supports prices, particularly in H2 2023,” Hittle added.
“If prices remain in the $70s per barrel at the time of the next OPEC+ meeting, the group would be inclined to consider an additional production cut beyond the current one in place to year-end,” the Wood Mackenzie VP continued.
When asked what he expected to happen at the next OPEC+ meeting, Matthew Bey, a Senior Global Analyst at RANE, said, “OPEC is not likely to make any significant moves at its April meeting, although the decline in oil prices over the last week makes it more likely that OPEC+ will consider deeper production cuts later this year”.
“The next OPEC meeting on 3 April is just an advisory panel. The next meeting where we would expect possible changes to production levels is not until June, though an earlier decision can always be made,” Bey added.
JMMC, OPEC/Non-OPEC Ministerial Meetings
The 48th Meeting of the Joint Ministerial Monitoring Committee (JMMC) is currently scheduled to take place on 3 April and the 35th OPEC and non-OPEC Ministerial Meeting is currently scheduled to take place on 4 June.
At the 47th JMMC meeting, which took place via videoconference on1 February, the JMMC reaffirmed its commitment to the declaration of cooperation, which extends to the end of 2023 as agreed in the 33rd OPEC and non-OPEC Ministerial Meeting in October, OPEC outlined in a statement posted on its website.
At the latest OPEC and non-OPEC ministerial meeting, which took place via videoconference on 4 December 2022, OPEC+ decided to hold production steady, OPEC’s website revealed. At the 33rd OPEC and non-OPEC ministerial meeting, which took place on 5 October 2022, OPEC+ decided to cut its overall production by two million barrels per day from August 2022 required production levels, starting in November 2022, the site highlighted at the time.
According to a production table posted on the OPEC website following that meeting, OPEC+’s voluntary production figure from November 2022 to December 2023 is 41.856 million barrels per day. The group’s August 2022 required production level was 43.856 million barrels per day, the table shows.
The table also outlines that Saudi Arabia and Russia’s voluntary adjustment figures are 526,000 barrels per day less than the August 2022 required production figures. The 526,000 barrel per day cuts are the joint highest, the table shows.
DoC Turns Six
On 10 December 2022, the Declaration of Cooperation between OPEC member countries and 10 non-OPEC oil-producing countries turned six.
“The declaration of cooperation is an unprecedented collaborative framework of 23 oil-producing countries that is based on trust, mutual respect and dialogue,” OPEC Secretary General, Haitham Al Ghais, said in a statement posted on OPEC’s site back in December.
“Six years later, the framework continues to play an instrumental role in supporting market stability, which is essential for growth and development, as well as attracting the necessary investment to ensure energy security,” he added in the statement.
According to OPEC’s site, the declaration of cooperation aims to secure sustainable oil market stability through cooperation and dialogue, including at the research and technical levels, for the benefit of all producers, consumers and investors, as well as the global economy at large.
Last month, Bey told Rigzone that there is a low probability that OPEC+ enters maximum production mode this year.
- By Andreas Exarheas
To contact the author, email andreas.exarheas@rigzone.com
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