Opec+ meeting adjourned with consensus elusive

Opec+ ministers will continue their meeting tomorrow after failing to reach consensus today on a crude production policy for February, four delegates said.

Most Opec+ countries are in favour of continuing current output ceilings next month but face resistance from Russia and Kazakhstan, which propose a 500,000 b/d increase to collective quotas in February, delegates said. The UAE initially backed this proposal, but now supports a rollover.

Russia has been focused on market share in its discussions, Iran's oil minister Bijan Namdar Zanganeh said. Further consultation is needed, a delegate said.

The diverging views reflect a muddy market outlook. Positive recent developments on Covid-19 vaccines in some countries have spurred optimism over demand recovery. But Saudi Arabia's oil minister Prince Abdulaziz bin Salman urged caution ahead of today's Opec+ meeting, highlighting the "worrying and unpredictable" nature of recent, more infectious strains of the virus in Europe.

"As we see light at the end of the tunnel, we must at all costs avoid the temptation to slacken in our resolve," he said. "Do not put at risk all that we have achieved for the sake of an instant but illusionary benefit."

The meeting has so far followed a similar course to last month's, when Opec members broadly in favour of a rollover of collective cuts into January faced opposition from the UAE, and non-Opec participants Russia and Kazakhstan.

The group eventually agreed in December to raise collective output quotas by 482,000 b/d for January, and to determine production levels for February, March and April at successive monthly meetings. A rollover would see Opec+ members that participate in the production restraint deal continuing to target output of 34.9mn b/d next month, a collective cut of around 7.2mn b/d largely from October 2018 baselines.

The Opec+ group will reconvene at 15:30 CET (14:30 GMT) tomorrow. This could delay Saudi Arabian state-controlled Aramco's release of its official February crude formula prices. The company has in the past pushed back its price releases, which broadly guide those from Iraq, Kuwait, the UAE and Iran, until Opec+ policy is clear.

By Rowena Edwards, Ruxandra Iordache and Nader Itayim