OPEC+ Navigates Challenges: The Commodities Feed Ahead of Key Meeting

The Commodities Feed: OPEC+ week

Sentiment remains fairly negative in the oil market, given the ongoing dispute within OPEC+ over production quotas. However, there are reports of progress ahead of the group’s meeting on Thursday.

Energy - OPEC+ makes progress

Sentiment in the oil market remains negative. ICE Brent settled a little more than 1% lower on Friday, which means that Brent has seen 5 consecutive weeks of closing lower. The delayed OPEC+ meeting takes place this Thursday, and instead of being held in person in Vienna, the meeting will be remote. Reports suggest that the group is making progress in coming to a deal with Angola and Nigeria, who are not happy with their lower 2024 production targets. Whilst Angola is producing below its target for next year, Nigeria is currently producing above its 2024 target. Expectations are that Saudi Arabia will at least roll over its additional voluntary cut of 1MMbbls/d into next year. Clearly, if we do not see this, it would put further downward pressure on the market, given the surplus over 1Q24. We believe that the Saudis will roll over this cut and there is a growing possibility that we see a deeper cut from the broader group. In doing this, the group would provide good support to the market going into 2024.