Angola says Opec ready to adapt to changing dynamics

Angolan oil minister and Opec president Diamantino Azevedo called for the producer group to remain prudent in the face of extreme crude price volatility, but said it is ready to adapt to changes in the market.

"We need to remain united, focused and ready. Ready to adapt to any changing market dynamics, as we have always done," Azevedo said as he addressed delegates ahead of today's Opec meeting.

Opec member countries are meeting today to consider the wider Opec+ group's January oil policy and whether to slow production increases. The Opec+ coalition is assessing the potential impact on demand from a potentially more transmissible Covid-19 strain, as well as upcoming strategic petroleum reserve releases by key crude buyers.

"Today the Covid 19 pandemic remains a persistent foe which continues to spook the markets. The sudden appearance of a potentially new and dangerous variant comes on top of new lockdowns in parts of Europe and is reversing a dramatic infection surge especially in unvaccinated populations," Azevedo said.

"On another front, the planned release of oil from a number of strategic reserves, reinforces the necessity of diligent market monitoring to avoid a return to market imbalance. And we need to pay close attention to downside risks associated with inflation spikes, rising debt levels and supply-chain disruptions."

An Opec forecast prepared for the Joint Technical Committee (JTC) — which assesses the current supply and demand picture — shows a surplus of 2mn b/d emerging in January, growing to 3.4mn b/d in February and 3.8mn b/d in March, according to one source.

Under the Opec+ current agreement the collective output ceiling rises by 400,000 b/d each month from August until April next year, and then by 432,000 b/d a month from May 2022 until last year's cuts are fully unwound. The increases must be rubber-stamped at monthly ministerial meetings and can be paused for up to three months if market conditions warrant it.

The Opec+ coalition — which is meeting tomorrow — has yet to deviate from the deal, despite persistent pressure from consuming nations for a quicker unwinding.

By Nader Itayim, Rowena Edwards, Ruxandra Iordache and Adal Mirza