Opec defers output discussions until 2 December

Opec ministers have deferred discussions on the outlook for global oil demand and how to address a potential widening supply surplus until they meet with their non-Opec counterparts tomorrow, delegates said.

Although Opec president Diamantino Azevedo opened the group's ministerial assembly today with a speech highlighting the uncertainties surrounding demand, the meeting itself did not broach the subject of January output quotas. Instead, it addressed only procedural issues such as Opec's long-term strategy, its budgets and the appointment of a new secretary-general, according to delegates.

The successor of outgoing Opec secretary-general Mohammad Barkindo, who ends his mandate in the summer of next year, has yet to be elected. Kuwait's former Opec governor Haitham al-Ghais has already been nominated, but the floor has now been opened for other countries to put forward candidates. Opec ministers will meet again in January to deal with the secretary-general issue, before the monthly Opec+ assembly, according to three delegates. Two of those delegates said the new secretary-general will be elected at that meeting by majority vote.

While expected to maintain political neutrality, the Opec secretary-general plays an important role as mediator, both within Opec itself and in recent years within the wider Opec+ coalition. In his near six-years at the helm, Barkindo has played a significant part in elevating the African contingent's position in the group.

In terms of near-term output policy, a decision on January crude output quotas will be made by Opec+ ministers tomorrow, informed by recommendations from the Opec+ group's Joint Technical Committee and Joint Ministerial Monitoring Committee. Earlier today, an Opec forecast showed a 2mn b/d surplus emerging in January, growing to 3.4mn b/d in February and 3.8mn b/d in March, according to one source.

The Opec+ roadmap to restore the production that it removed from the market last year entails monthly hikes of 400,000 b/d to April next year, followed by a rise of 432,000 b/d each month until all of the group's original 9.7mn b/d cut is 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.

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