OPEC's members have agreed to extend existing crude oil production cuts for a three-month period starting in January, and will lobby the cartel's partners to agree to the move, Algerian Energy Minister and OPEC rotating president, Abdelmadjid Attar, has said, his remarks cited by Reuters.
The common goal of the alliance is to keep afloat a crude market devastated by the Covid-19 pandemic and which is slowly recovering from the depths into which prices plunged at the end of April.
However, most observers expect the cut instead to be extended by three to six months to take into account the ongoing effects of the virus.
OPEC+ is now considering extending the existing cuts of 7.7 million bpd, about 8% of global demand, into the first months of 2021, a position supported by OPEC's de-facto leader Saudi Arabia and other major producers in the group, sources said. "Some are opposed to extending the previous decision, and this makes matters more hard". He was later quoted by Algeria's state news agency saying there was consensus, and he was optimistic there would be an agreement to maintain the current cuts through the first quarter.
According to the minister, "the shock to the oil industry" experienced during the past year was "massive", and "its severe impacts will likely reverberate in the years to come."
Key players within the grouping have hinted in recent weeks that an extension is on the table despite encouraging news from trials for vaccines by pharmaceutical companies like AstraZeneca, Pfizer/BioNTech and Moderna.
Back in March, OPEC held its last meeting in its Vienna headquarters before the pandemic forced them online.
Ministers from the cartel will start meeting via video conference at 1 pm GMT Monday and will be hoping that they can turn a page on a disastrous year.
Whether all members are now sticking to the output quotas assigned to them has also become a sensitive topic.
Analysts and traders also expect the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russian Federation - the OPEC+ grouping - to delay next year's planned increase in oil output as a second Covid-19 wave has hit global fuel demand. On Friday, Brent futures, the global benchmark for crude oil, spiked 0.79 per cent to $48.18 per barrel, whereas West Texas Intermediate (WTI) futures, the U.S. benchmark, slid 0.39 per cent to $45.53 per barrel.
"The reality is far from that", he added, with some OPEC members still "holding a grudge against their laggard allies" who did not reduce their oil production as promised.
Oil fell about 1% on Monday on uncertainty about whether OPEC+ would agree to extend its deep output cuts at talks this week, but COVID-19 vaccine hopes kept crude benchmarks on track to rise by more than 25% in November.
