How does OPEC + cope with downward pressures in oil prices?

Energy affairs adviser Faisal Al-Fayek said there is a lot of pressure in view of the OPEC + meeting, explaining that the meeting of the Ministerial Committee and the Technical Committee has been postponed until there is a careful reading of what is happening in the markets.

Al-Fayek added in an interview with “Al-Arabiya” that the bearish momentum is very strong with the weekly close and Friday, the big sales of contracts future on oil, which led to a drop in prices of more than 10%.

Al-Fayek explained that the markets had a decline at the end of each year for various reasons, but questyear has arrived the new mutant (Omicron), which needs two weeks of evaluation to determine its impact on global demand.

Al-Fayek continued: “We now have the new variable and there is a withdrawal factor from the strategic reserve, which turned out to be a very superficial amount … All these pressures can push OPEC + to restrict supplies.”

He indicated that the way is open for OPEC + to come up with a strategy for 2022, after the deal lasted 5 years.

Al-Fayek said stocks of members of the Organization for Economic Co-operation and Development fell 206 million barrels below the media over the past five years and 374 million barrels are below last year’s levels.

Al-Fayek said: “OPEC + faces several opposing factors … Will the market really see oversupply over the next year? … On the other hand, global stocks are low.”

And he indicated that coalition meetings over the past six months have been easy and smooth and their time has been short, but this meeting would be delicate.

He specified that the OPEC + group still maintains 3.6 million barrels per day of production, and can pump it gradually, as happened in 2021, or it can hold on and wait for the market trend in the next two months and apply a new strategy according to what dictated by the market.

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