OPEC said on Monday that it would not shirk its responsibilities to the market as fears about the next Covid-19 wave push down prices.
Oil prices sank on Monday over disappointing economic data out of China, fears of this resurgence of coronavirus cases, additional lockdown measures in Europe, and the looming threat that OPEC could turn on the taps in January as originally planned.
But sources inside member countries, according to Reuters, said that this planned output increase could be reversed should the need arise.
To assuage the fears present in the market, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman reminded the markets that OPEC has been particularly flexible during this trying year, adapting “to changing circumstances when required.”
The Energy Minister added that OPEC would not dodge its responsibilities “in this regard”.
Oil prices, however, failed to recover.
OPEC+ held its ministerial monitoring committee (JMMC) today to review member country performance as it pertains to sticking to the agreed-upon production cuts. Noteworthy laggards have been Nigeria and Iraq, both of which had been tasked with overachieving in August, September, and beyond due to their chronic overproduction earlier in the agreement.
For now, OPEC is still planning to ease up on its restriction oil production quotas come January, from the 7.7 million bpd production cuts that are in effect now, to 5.8 million bpd. While it was suggested today that OPEC might not ease the production cuts in January after all, that decision won’t actually be made until the full group meeting which will be held on November 30/December 1.
Until then, OPEC is likely to jawbone the market to try to keep oil prices from further slippage—a scenario that would devastate many of the OPEC member economies as they rely heavily on oil revenues for their budgets.