Eurozone Stocks Rise At Open Ahead Of OPEC+ Meeting


Eurozone stock markets opened higher on Thursday as investors await an output decision by major oil-producing nations.

The Frankfurt DAX index was up 0.4 percent at 14,396.71 points while the Paris CAC 40 rose 0.6 percent at 6,455.27 points.

London’s FTSE 100 was shut on Thursday for a long bank holiday weekend to mark Queen Elizabeth II’s Platinum Jubilee.

The OPEC+ group of major oil producers, led by Saudi Arabia and Russia, is expected to continue its policy of modestly increasing production when it meets later on Thursday, days after the EU agreed to ban most Russian crude.

Energy prices have soared since Russia invaded Ukraine on February 24, fuelling a sharp rise in inflation that is prompting central banks to tighten their monetary policies.

Oil prices fell by almost two percent on Thursday Financial Times report that Saudi Arabia was considering a plan to boost output as Russia struggles to meet targets owing to Ukraine war-linked sanctions.

The Wall Street Journal reported on Wednesday that Russia could be removed from the OPEC+ output deal.

The move could allow the Saudis and other nations to raise their output to meet the shortfall created by a European Union ban on most Russian oil.

OPEC+ has so far resisted US pressure to increase production in order to calm the markets.

“Everything rests on the OPEC+ meeting today,” said Jeffrey Halley, analyst at online trading platform OANDA.

“If Russia is sidelined, I mean exempted from its production quotas, with other members stepping up, European markets could find themselves with a decent tailwind today. A business-as-usual outcome is likely to see a disappointing reaction,” he said.

OPEC Meeting To Set February Production Levels

In this file photo taken on November 29, 2016, the logo of OPEC is pictured at the OPEC headquarters on the eve of the 171th meeting of the Organization of the Petroleum Exporting Countries in Vienna, Austria. JOE KLAMAR / AFP
In this file photo taken on November 29, 2016, the logo of OPEC is pictured at the OPEC headquarters on the eve of the 171th meeting of the Organization of the Petroleum Exporting Countries in Vienna, Austria. JOE KLAMAR / AFP.


Members of the OPEC group of oil producers and their partners are meeting via videoconference Monday to decide production levels for February, which it hopes to continue boosting.

The OPEC+ ministerial meeting comes after the Covid-19 pandemic tanked the market for crude in 2020 and had a delayed start, finally kicking off at around 1530 GMT.

Despite a slight recovery of prices towards the end of last year, the 13 members of the Organisation of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and their ten allies, led by Russia, are still suffering under a highly volatile market.

After their last videoconference summit, held from November 30 to December 3, the OPEC+ members agreed to raise production levels by half a million barrels per day in January.

At the same meeting, OPEC+ agreed to meet at the beginning of each month to decide on any adjustments to production volumes for the following month.

That agreement “paved the way for a gradual return of 2 million barrels per day to the market over the coming months,” OPEC’s general secretary, Mohammed Barkindo, said on Sunday.

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Analyst Helima Croft from RBC said on Monday that given continuing uncertainty over coronavirus vaccine rollouts and climbing infection figures in many countries, OPEC and its allies would “likely play it safe and forego any additional output increase for now”.

Speaking at the beginning of Monday’s meeting, Saudi Energy Minister Prince Abdulaziz bin Salman told his counterparts that “as we see light at the end of the tunnel, we must at all costs avoid the temptation to slacken off in our resolve”.

At the risk of being seen as a “killjoy”, he emphasised continuing uncertainty and fragile demand and urged others: “Do not put at risk all that we have achieved for the sake of an instant but illusionary benefit.”

– Stumbling blocks –
OPEC members typically meet twice a year at the cartel’s headquarters in Vienna, but last year, summits were scheduled more frequently to maintain a strong influence on the oil market amidst the pandemic.

Despite demand remaining uncertain, analysts have said that OPEC+ demonstrated that it can manage the market.

Prices for both North Sea Brent Crude and West Texas Intermediate (WTI) crude hit ten-month highs on Monday, at $53.33 and 49.83 respectively, but have since pulled back and were down in afternoon trading in Europe.

Though far lower than the prices seen at the start of 2020, crude is well up on the lows seen last year, particularly in March, when Moscow and Riyadh embarked on a brief but intense oil price war that caused prices to plummet.

Russia and Saudi Arabia are respectively the second and third biggest oil producers in the world after the United States.

On April 20, WTI crude collapsed to minus $40.32 per barrel — meaning producers paid buyers to take the oil off their hands.

Relations between the two oil giants have eased since then, with the Russian and Saudi energy ministers meeting in mid-December in a display of unity.

It remains difficult, however, to predict the evolution in demand due to developments in the pandemic.

Despite the heft of the OPEC+ club, countries outside the system have a major impact on the oil market; principally the United States which is still producing 11 million barrels of crude per day.


Former NNPC GMD, Mohammed Barkindo is New OPEC Secretary-General

BarkindoA former Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mohammed Barkindo, is the new Secretary-General of the Organisation of Petroleum Exporting Countries (OPEC).

He replaces Libya’s Abdalla El-Badri, who had completed full terms.

OPEC has been looking for a replacement for El-Badri, who was elected as acting Secretary-General in December until the end of July after serving full terms.

Oil ministers from the 13-member group of powerful oil producing countries met in Vienna, Austria on Thursday, July 2.

The consensus of all members, which in the past had sometimes been elusive, is required for the appointment of a new secretary-general.

Barkindo was the NNPC GMD from 2009 to 2010. He has also been an acting Secretary-Genmeral of OPEC in 2006.

The Federal Government nominated Mr Barkindo for the position citing his qualification and experience.

Oil Price Slip: Diezani May Call Emergency OPEC Meeting

OPECAn extraordinary meeting of the OPEC may be called if crude oil prices slip any further, the Petroleum Minister of Nigeria said in an interview with the Financial Times.

In a sign of growing alarm over the impact of oil’s collapse on oil-producing economies, Diezani Alison-Madueke said: “We’re already talking with member countries”.

Her statement in the interview was published on Monday.

As OPEC president, she is responsible for liaising with member countries and the producer group’s secretary-general in the event of an emergency meeting.

If the price “slips any further it is highly likely that I will have to call an extraordinary meeting of OPEC in the next six weeks or so”, she said.

Almost all OPEC countries, except perhaps the Arab bloc, are “very uncomfortable,” she said.

Oil Prices Briefly Rose

The comments are the first public sign of the deepening unease about the oil crisis since Venezuela and Iran last month pushed for the cartel to cut output in a bid to reverse the more than 50-percent drop in prices since June last year.

In November, the 12-member group chose to hold production at 30 million barrels a day. The next official meeting is scheduled for June.

Global benchmark Brent oil prices briefly rose by more than $1 a barrel on the comments, reversing earlier losses, but quickly sank again as dealers doubted whether there was any scope for rapid action given core Gulf OPEC members led by Saudi Arabia have given no sign they are ready to curb production.

Nigeria “obviously needs more money for its oil, but if the Saudis, who control one third of OPEC production, do not go along, what can it do?” said James L. Williams, energy economist at WTRG Economics in London, Arkansas.

U.S. WTI crude April futures settled down $1.36, at $49.45 a barrel, having briefly touched a session high of $50.99. Benchmark Brent crude was down $1.30 at $59.90, after spiking as high as $60.67.