EghtesadOnline: As the OPEC+ group’s decision on oil production cuts nears, there are renewed concerns about the future of the organization as it tries to rebalance the market while securing higher revenue and market share in the medium-term, Goldman Sachs, an American multinational investment bank and financial services company headquartered in New York City, said in a note.
OPEC+, comprising the Organization of the Petroleum Exporting Countries, Russia and other producers, is scheduled to meet on Nov. 30 and Dec. 1, and is likely to discuss extending oil output curbs into next year due to weak demand amid surging Covid-19 infections, Reuters reported.
“Potentially complicating the meeting could be a push by the UAE to raise its baseline quota which screens as low relative to that of Saudi and Russia, although we don’t think this will derail an extension,” Goldman said.
The bank sees a coordinated move to restrict output as the best near-term action for oil prices, given the high levels of crude inventories, Libya’s production recovery, and a new wave of coronavirus infections leading to renewed partial lockdowns.
Goldman expects OPEC+ to delay its production ramp-up for three months, helping bring the global market deficit back to 1 million barrels per day in the first quarter of 2021.
The bank expects Brent prices to average $47 per barrel in the first quarter, if production curbs are extended.
UK bank Barclays also said on Monday it expected OPEC+ to delay ratcheting up production by three months.