Differences in crude oil production: ups and downs in OPEC meeting |
[ Time:2021-07-13 | Hits:264 ] |
| The 18th ministerial meeting of the organization of Petroleum Exporting Countries (OPEC) and non OPEC oil producing countries, which has been postponed many times, has been cancelled again recently due to differences on the issue of crude oil production. Members were expected to reach an agreement on increasing oil production at the meeting. The ups and downs of the OPEC meeting caused the market to worry about the fluctuation of crude oil supply and demand, and stimulated the sharp fluctuation of international oil prices. At the beginning of this month, OPEC and non OPEC oil producing countries originally planned to hold a ministerial meeting to discuss the next production scale. However, due to serious differences, members held several rounds of consultations, and the meeting was repeatedly postponed. The parties were originally scheduled to hold another ministerial meeting on July 5, but the meeting was eventually cancelled. OPEC Secretary General barjindo said in a statement that the parties have yet to reach a consensus on the timing of the next meeting. Saudi Arabia has proposed a small increase in production, claiming that OPEC members should increase the average daily output by 400000 barrels from August to December, that is, increase the daily production capacity by 2 million barrels by the end of this year, so as to reduce the daily production reduction to about 3.8 million barrels; At the same time, we hope to extend the current production reduction agreement to the end of 2022. This idea is supported by all members except the UAE. The UAE believes that it is too early to discuss the extension of the production reduction agreement. If it wants to accept the extension conditions, it must agree to substantially increase the daily crude oil production of the UAE by about 700000 barrels. Saudi Arabia clearly opposes this, saying that it should not sacrifice the overall interests for the appeal of a country in the United Arab Emirates. The failure of the negotiation led to the failure of the production increase expected by the outside world in August. The international crude oil market reacted fiercely. For fear of possible oil shortage in the market, the futures price of light crude oil delivered in August on the New York Mercantile Exchange soared to $76.98 per barrel on July 6, hitting the highest level since November 2014. In March last year, affected by the epidemic, the demand for crude oil fell sharply, and the international oil price fell accordingly. The futures price of light crude oil delivered in May on the New York Mercantile Exchange once fell to a negative number. OPEC and non OPEC oil producing countries took record measures to limit production in April 2020, cutting production by 9.7 million barrels per day at one time. After reducing the overall crude oil production, the international oil price rebounded gradually and returned to the pre epidemic level by the end of last year. Since the beginning of this year, with the gradual restart of national economies, the international oil price has warmed up again, and the production reduction restrictions have gradually relaxed. Media analysis pointed out that in view of the uncertainty of the recovery of global crude oil demand after the epidemic, Saudi Arabia hopes that countries will maintain a certain amount of idle crude oil production capacity in order to play a buffer role in emergencies. However, about 30% of the UAE's production capacity is idle due to the current production reduction agreement. At present, the international oil price continues to rise, and the UAE hopes to expand its income by increasing production. At present, all parties are still actively mediating, hoping to promote continuous consultation between the two sides. Iraqi Oil Minister Ismail said he hopes to set a date for the next meeting in the next 10 days, which should be able to reach an agreement satisfactory to all parties. The website of Kuwait's "Arab times" pointed out that despite differences, oil producing countries should remain united and must sit down to discuss compromise solutions. Al Jazeera's website points out that a stalemate may lead to a price war between the two countries, thus harming all oil producing countries. Efforts should be made to avoid such a situation. U.S. energy analyst Stephen Shylock pointed out that oil producing countries are expected to restart talks and reach a compromise soon. Some analysts believe that for their own interests, oil producing countries will not allow international oil prices to fluctuate dramatically. In order to avoid market panic, they will soon start a dialogue. If the output is increased rashly, the oil price may be impacted, which is not conducive to the income of oil producing countries and the stability of the international crude oil market. Therefore, it is more likely to reach an agreement on gradual and moderate production increase. |