OPEC+ says it will ensure oil prices do not plunge again

The head of OPEC has said that demand for oil is recovering more slowly than expected as an increasing number of countries are reimposing curfews and lockdowns. (AFP)
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Updated 16 October 2020

OPEC+ says it will ensure oil prices do not plunge again

  • Secretary general said group would take stock of its policy at the ministerial meeting next month

LONDON: The OPEC+ alliance will ensure oil prices do not plunge steeply again when it meets to set policy at the end of November, OPEC’s secretary general said on Thursday, adding that demand has been recovering more slowly than expected.

“I want to assure you that the OPEC, non-OPEC partnership will continue to do what it knows best, by ensuring that we don’t relapse into this almost historic plunge that we saw,” Mohammad Barkindo said.

Barkindo was answering a question at the Energy Intelligence Forum on whether there was room for a planned increase in oil output from January by OPEC+, a grouping that includes OPEC states, Russia and other allies.

“We have to be realistic that this recovery is not picking up pace at the rate that we expected earlier in the year,” he said. “Demand itself is still looking anaemic.”

A technical OPEC+ committee meeting is taking place on Thursday to discuss compliance with oil cuts and market fundamentals.

The group had 102 percent compliance with its cuts in September, two OPEC+ sources told Reuters.

Countries such as Iraq, Nigeria and the UAE, which had fallen short of their commitments, have been asked to make additional cuts until the end of the year to compensate for the shortfalls.

Barkindo said the compensation scheme was working well.

OPEC+ is due to taper production cuts by 2 million barrels per day (bpd), from 7.7 million bpd currently, in January.

Barkindo said when OPEC+ holds its ministerial meetings on Nov. 30 and Dec. 1 it will take stock of the whole year to inform any decision to stay the course or amend its policy.

On Tuesday, the energy minister from the United Arab Emirates told the same event that OPEC+ will stick to their plans to taper oil production cuts from January.

It comes as some European countries are reviving curfews and lockdowns to try to contain the rise in new coronavirus cases, with Britain expected to impose tougher COVID-19 restrictions on London from midnight on Friday.

A third of France’s population has been placed under nightly curfew to tackle climbing infections.

India, the world’s third biggest oil consumer, is on track to overtake United States with the world’s most COVID-19 infections, and is bracing for a surge of cases in coming weeks as it heads into its main holiday season.

“If demand weakens noticeably, OPEC+ will have no choice but to call off its production increase if it does not want to risk a renewed oversupply and another price slide,” Commerzbank said.


Britain, EU tell each other to move on trade

Updated 20 October 2020

Britain, EU tell each other to move on trade

  • Both sides call on each other to protect billions of dollars of trade between the neighbors

BRUSSELS: Britain and the EU said on Monday the door was still open for a deal on their post-Brexit relationship, calling on each other to compromise to find a way to protect billions of dollars of trade between the neighbors.

With just over two months before Britain ends a status quo transition arrangement with the EU, talks on a trade deal are deadlocked, with neither wanting to move first to offer concessions.

A no-deal finale to Britain’s five-year Brexit drama would disrupt the operations of manufacturers, retailers, farmers and nearly every other sector — just as the economic hit from the coronavirus pandemic worsens.

European Commission Vice President Maros Sefcovic repeated on Monday that the EU still wanted a trade deal but not “at any cost” after British Prime Minister Boris Johnson said on Friday there was no point in continuing talks.

“It has to be a fair agreement for both sides — we are not going to sign an agreement at any cost,” Sefcovic told reporters after meeting Michael Gove, Britain’s point man on the existing divorce agreement, in London.

“The EU is ready to work until the last minute for a good agreement for both parties,” Sefcovic said.

Britain, increasingly frustrated by the EU’s refusal to start text-based talks, called on the bloc to make the first move, with its housing minister saying that Brussels only had to make “some relatively small but important changes.”

Housing Secretary Robert Jenrick called on the EU to “go that extra mile, to come closer to us on the points that remain for discussion.”

A spokesman for Johnson again ruled out prolonging any negotiation beyond the end of this year, when the transition period runs out, saying the EU “must be ready to discuss the detailed legal text of a treaty in all areas with a genuine wish to respect UK sovereignty and independence.”

EU chief negotiator Michel Barnier had been due in London for talks with British counterpart David Frost this week. Instead, they will now speak by telephone on Monday to discuss the structure of future talks, Barnier’s spokesman said.

Negotiations broke down on Thursday, when the EU demanded Britain give ground. Issues still to be resolved include fair competition rules, including state aid and fisheries. EU diplomats and officials cast Johnson’s move as a frantic bid to secure concessions before a last-minute deal was done, and European leaders have asked Barnier to continue talks.

British officials have repeatedly said any deal has to honor Britain’s new status as a sovereign country and not try to tie it to EU rules and regulations.

German Chancellor Angela Merkel said compromises on both sides would be needed. French President Emmanuel Macron said Britain needed a deal more than the 27-nation EU.

Britain is launching a campaign this week urging businesses to step up preparations for a no-deal departure. In a statement accompanying the launch, Gove says: “Make no mistake, there are changes coming in just 75 days and time is running out for businesses to act.”

More than 70 British business groups representing over 7 million workers on Sunday urged politicians to get back to the negotiating table next week and strike a deal.