OPEC+ meeting could result in deeper cuts

investmentnews.com:

OPEC+ began its meeting on Thursday, seeking to resolve a deadlock on oil quotas and consider further production cuts to shore up flagging crude prices.

Group leader Saudi Arabia is pressing fellow alliance members to join it in restraining supplies in order to stave off a renewed oil surplus next year. A deeper collective cutback of 1 million barrels a day or more will be discussed when ministers from the Organization of Petroleum Exporting Countries and its allies hold their video conference, delegates said.

“I think there will be a deal because there’s a lot of pressure on the group — they’ve seen prices come off a lot, there are concerns about the global economy,” Amrita Sen, director of research at consultant Energy Aspects Ltd., told Bloomberg television. A new official group cut of 1 million barrels a day would actually be only half as big in real terms because some countries are already pumping below their targets, she said.

Obstacles to an accord remain — most notably, a dispute over whether African members Angola and Nigeria should accept reduced output targets to reflect their diminished production capabilities. The stalemate has meant that Thursday’s gathering is being held four days later than originally planned. 

Failure to resolve the issue could result in a so-called rollover at the meeting, in which members maintain output at current levels, delegates said. 

OPEC+ faces pressure to intervene in crude markets following a 13% drop in prices over the past two months amid plentiful supplies and a darkening economic backdrop. Markets could weaken further next year, when forecasters including the International Energy Agency anticipate a sharp slowdown in demand growth.

“The market wants to know whether or not