Saudi energy minister reiterates OPEC+ commitment to support volatile markets

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Saudi Arabia said on Monday no-one should doubt OPEC’s commitment to propping up volatile markets, as it held talks with the world’s other leading oil exporter Russia on Monday.

“This group has shown, especially in this year, that it has the flexibility to adapt to changing circumstances when required. We will not dodge our responsibilities in this regard,” Saudi Energy Minister Prince Abdulaziz bin Salman said.

“Nobody in the market should be in any doubt as to our commitment and our intent,” Prince Abdulaziz told the opening of JMMC.

“There have been loads of mixed messages on oil market in the past month. There have been pledges from overproducing countries to compensate in October-December,” Prince Abdulaziz bin Salman said.

“We must predict, prevent and be proactive,” he said.

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Oil producer group OPEC+ was meeting to discuss the weakening demand outlook in the face of rising coronavirus infections as well as increased
output from Libya but is unlikely to recommend immediate action, OPEC+ sources said.

Speaking at the opening of an OPEC+ ministerial monitoring committee, Russian Energy Minister Alexander Novak said that the second wave of the COVID-19 pandemic has slowed down the recovery of the oil market, which has been extremely volatile.

Speaking at the opening of an OPEC+ ministerial monitoring committee, Novak also said the panel will discuss later the efforts by some countries who have not achieved targets in oil output cuts.

It will also consider forecasts for oil demand, he said.

OPEC+, have been reducing output since January 2017 in an effort to balance the market, support prices and reduce inventories.

They are currently curbing production by 7.7 million barrels per day (bpd), down from 9.7 million bpd, and are due to taper cuts by 2 million bpd in January.

Several OPEC watchers, including analysts from US investment bank J.P. Morgan, have suggested that a bearish demand outlook could prompt OPEC+ to delay any easing of the reductions. The United Arab Emirates and Russia, however, have said that cuts would be eased as planned.

The group will meet again on November 30.

OPEC+ experts last week discussed risks of a persisting supply overhang in 2021 in the event of a prolonged and severe second wave of the COVID-19 pandemic.

“Demand itself is still looking anaemic,” OPEC Secretary General Mohammad Barkindo said last week.