London: The oil producers and allied members of the Organization of Petroleum Exporting Countries (OPEC) are expected to increase production at the meeting on Thursday in response to a rebound in demand and prices.
Although the so-called OPEC+ organization is often opposed to how much oil is injected into the market, the sudden drop in prices triggered by the coronavirus pandemic prompted members to agree to drastically cut production to support prices.
Vaccination campaigns are now underway, and demand from China, the world’s largest oil importer, has rebounded to pre-pandemic levels. The success of Thursday’s meeting will depend on whether the heavyweights in Russia and Saudi Arabia can reach a consensus.
“There is within the alliance a major difference of opinion on the capacity of the oil market to absorb new volumes” of crude, said Bjarne Schieldrop, chief commodities analyst at SEB research group.
The world’s second-largest crude producer after the United States, Russia “leans for caution”, Schieldrop explained, while number three, Saudi Arabia, “defends the increase in supply”.
On the sidelines of a technical meeting Tuesday, the head of OPEC, Mohammed Barkindo, pushed for middle ground when he said the cartel must emphasise “cautious optimism” given persistent risks from the pandemic.