The board of the OPEC Economic Commission will meet today and tomorrow, while technical experts from OPEC and non-OPEC members will meet on Friday.

OPEC and its allies are starting a series of crucial technical meetings this week to iron out difficulties and prepare the ground for next week's ministerial meeting to discuss extending oil production limits to next year. due to weak demand in the wake of a second wave of Covid-19.

The board of OPEC's economic commission will meet today and tomorrow, while technical experts from OPEC and non-OPEC members will meet on Friday, OPEC sources quoted by Reuters said.

The OPEC Council will thus discuss the possible scenarios to be adopted by the ministers, at their official meeting which will have to decide, as of 1 December next, whether or not to renew, in 2021, the current cuts. "The OPEC+ ministers will probably agree to extend the current production for the first quarter of 2021", an OPEC delegate told Reuters.

Another delegate said he hoped the market would be able to absorb more barrels in 2021. "There are still challenges ahead, but I hope the vaccine will be a game changer soon," he added.

The OPEC+ producer group was expected to increase its oil production by 2 million barrels per day (bpd) in January – about 2% of global consumption – as part of a steady easing of record supply cuts implemented this year.

But with demand weakening due to a second wave of the pandemic, OPEC+ has considered delaying the increase or even making further cuts.

The option that is gaining support from OPEC+ countries is to maintain the existing limits of 7.7 million b/d for another three to six months, OPEC+ sources said, rather than increasing the reduction to 5.7 million b/d in January.

Oil  at highest since March

In this context, OPEC member Libya said it had no intention of accepting OPEC production cuts until its oil production stabilized at 1.7 million b/d. It currently produces about 1.25 million b/d.

This could be a sticking point in the upcoming meetings, with Iraq not yet fully complying with OPEC's cut-off decisions.

On the price front, oil yesterday hit its highest level since March, rising to $47 a barrel, as a promising third coronavirus vaccine raised hopes for a faster recovery in economic growth and oil demand next year.

AstraZeneca said on Monday that its Covid-19 injection was 70% effective in trials and could be up to 90% effective, giving the fight against the pandemic a third vaccine. This follows the positive results of Pfizer/BioNTech and Moderna.

 Brent rose 31 cents, or 0.7%, to $46.37 a barrel yesterday morning, and hit a session high of $46.72, its highest since March 6.

U.S. West Texas Intermediate crude gained 32 cents, or 0.7 percent, to $43.38. "The fight against the coronavirus is intensifying and proving increasingly successful," said Tamas Varga of broker PVM.   on the rise," he added, according to Reuters.

This is the highest level of Brent since a price war between Saudi Arabia and Russia, as demand began to crash due to the March pandemic that caused prices to fall. Both benchmarks stabilized at around 2% on Monday, after gaining nearly 5% last week.

Also backing oil and financial markets in general, U.S. President Donald Trump on Monday allowed officials to transition to Joe Biden's administration. "With a Biden presidency seen as more favorable to international trade, markets have assumed that consumption will rise again in 2021," said Jeffrey Halley of Oanda brokerage.

Expectations that U.S. crude inventories edged down last week also supported prices.   

The article EPC and its allies are starting a series of crucial meetings appeared first on El Watan.