Oil markets are now fully focused on the upcoming OPEC+ meeting, with reports that the group may deepen cuts being counteracted by an apparent lack of unity amongst OPEC members on the issue.
Oil markets are once again on edge ahead of the OPEC+ summit this weekend, with calls for deeper cuts circulating concurrently to rumors of OPEC members not being ready to agree on any coordinated response. Hence, Monday’s spike that saw Brent move back to $82 per barrel had tapered off by Tuesday morning. Barring a surprise in this week’s U.S. oil inventory report, all the attention will be geared toward Vienna over the weekend. As OPEC+ prepares for its meeting on November 26, African producers are tacitly lamenting the oil group’s recalibration of 2024 production targets that will curb the maximum amount Nigeria or Angola can produce.
Following tense negotiations in June, all African countries agreed they would be subjected to lower 2024 quotas unless they could demonstrate higher production capacity before November, partly explaining the bumper production figures from Nigeria and Angola.
Nigeria, pumping only 1.38 million b/d on average in the first half of 2023, has been some 400,000 b/d below its OPEC quota, similar to Angola which still carries a 1.46 million b/d quota despite production averaging only slightly above 1 million b/d. Three upstream consultancies – Rystad, IHS, and WoodMac – have submitted their African production capacity figures to the OPEC secretariat and the OPEC+ meeting is believed to be deciding on their fate this Sunday.