BAKU, Azerbaijan, Nov.30
By Leman Zeynalova – Trend:
OPEC is expected to roll over its output cuts to the end of 2020, Trend reports citing UK-based Capital Economics research and consulting company.
“This would be unlikely to have a significant impact on prices. However, a decision to deepen output cuts would probably give a lift to the oil price,” said the company.
As for the oil prices, Capital Economics said that they were flat on the week, with Thanksgiving holidays keeping a lid on trading activity.
“Positive noises on the US-China trade front briefly nudged the price of Brent above $64 per barrel. However, a small build in US inventories mitigated price gains and kept commercial stocks above their 5-year average. Next week, the market will be focused on the outcome of the OPEC+ meetings. We expect the group to extend its output quota until the end of 2020,” said the company.
When coming to natural gas, the prices in US fell by around 10 percent w/w, according to Capital Economics.
“We suspect an unseasonably mild November is the likely cause. Looking forward, we think that strong demand growth and expanding export opportunities will ensure that the average price of US natural gas will be higher in 2020 than 2019. Meanwhile, Rotterdam coal prices have not experienced their usual seasonal lift, probably because of forecasts of mild winter weather in Germany in December and low natural gas prices,” said the company.
In late 2018, OPEC and a number of countries outside this organization (OPEC+ format) decided to modernize the terms of the agreement on the reduction of oil production, in force from the beginning of 2017. The countries agreed to reduce the total production by 1.2 million barrels per day from the level of October 2018.
On July 2, 2019, a decision was made in Vienna to extend the agreement on reducing oil production by OPEC member and non-member states until the end of the first quarter of 2020.
The 177th Meeting of the OPEC Conference is expected to be held December 5, 2019, followed by the 7th OPEC and non-OPEC Ministerial Meeting on December 6 in Vienna, Austria.
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