Opec adjourns ministerial meeting amid policy differences

No agreement was reached yesterday at the ministerial meeting, where non-Opec producers Russia and Kazakhstan pushed for an incremental increase in supply. Reuters

Opec+ adjourned a ministerial meeting of producers as differences arose over the extension of the current level of production cuts.

The group will convene at 3.30pm Vienna time to discuss whether to keep drawing 7.2 million barrels per day from the markets or to bring additional supply of 500,000 bpd.

No agreement was reached on Monday during the ministerial meeting, where non-Opec producers Russia and Kazakhstan pushed for an incremental increase in supply.

Crude prices fell as markets remained uncertain over the policy direction of the group. Brent, the international marker, was down 0.20 per cent, trading at $50.99 per barrel at 8.26am UAE time. West Texas Intermediate, which tracks US crude grades, was down 0.1 per cent at $47.57 per barrel.

At the opening of the ministerial session, Saudi Arabia, the world's largest exporter of crude, urged members not to slow down their momentum in correcting market imbalances.

"As we see light at the end of the tunnel, we must – at all costs – avoid the temptation to slacken off our resolve," Prince Abdulaziz bin Salman, Saudi Arabia's energy minister told an extraordinary meeting of Opec+ ministers.

He said the introduction of Covid-19 vaccination programmes was "the single most important factor in bringing about economic recovery", with implications for a sustained improvement in the demand for oil.

The minister, who alongside Russia heads a 23-member group of producers, said the optimism seen in markets following news of the vaccine efficacy should be balanced with vigilance.

"At the risk of being seen as a killjoy in the proceedings, I want to urge caution, even in this generally optimistic environment. The level of uncertainty in the world remains high," he said.

A rising number of coronavirus cases around the world cloud the prospects of economic recovery and derail the rebound in crude demand.

The UK has entered its third lockdown after a variant strain of the Covid-19 virus led to a rise in number of cases. Vaccine rollout is also hobbled with challenges, which has slowed distribution.