Extraordinary times call for extraordinary leadership in OPEC+ and Saudi Arabia stepped up
Cornelia Meyer
January 06, 2021 14:47
Saudi Arabia’s Energy Minister Prince Abdul Aziz bin Salman says the Kingdom lived up to its role as “the guardian of the industry.” (AFP file photo)
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The coronavirus (COVID-19) pandemic has taught us how quickly things can change. In the oil industry, things were looking so good in mid-December when the Joint Ministerial Monitoring Committee of OPEC+ (a group of OPEC countries and 10 non-OPEC allies) postponed its meeting until the beginning of January amid rising oil prices and high hopes for the rollout of COVID-19 vaccines.
OPEC, non-OPEC countries to increase production in January
January 6, 2021
The Organisation of Petroleum Exporting Countries (OPEC) and the non-OPEC countries have agreed to increase crude oil production by 0.5 million barrels per day (mb/d) in January.
The group reached the agreement at the 13th OPEC and non-OPEC Ministerial Meeting (ONOMM), held via videoconference, on Tuesday in Vienna.
The meeting acknowledged the need to gradually return two mb/d to the market, with the pace being determined according to market conditions.
It reconfirmed the decision made at the 12th ONOMM to increase production by 0.5 mb/d starting in January 2021, and adjusting production to 7.7 mb/d from 7.2 mb/d.
Crude markets slipped, losing more than a fifth of their value in volatile trade in 2020. Reuters/File
2021 has begun. A disruptive, tumultuous, 2020 has come to an end. How would ‘crude’ markets behave in the new year remains a moot question?
Looking into the new year, one could see a number of variables in play.
The Covid-19 pandemic had triggered demand destruction, with some insisting that the global oil demand may have already peaked. Crude markets hence slipped, losing more than a fifth of their value in volatile trade in 2020. Lifestyles changed, apparently forever. ‘Work from home’ became the new normal, commuting to the workplace became extinct as lockdowns to combat the pandemic, depressing the overall economic activity. All this resulted in a demand drop apparently for long.
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Oil outlook: Can the events of 2020 ever be repeated?
Faisal Faeq
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In 2019, the average Brent crude price was $64, while in 2020 it started at around $70, falling to $50 and averaging at closer to $40.
In early 2020, the Brent crude oil price hit $70 after US-China trade tensions eased and the impact of the trade dispute on oil started to fade. An improvement in the global economic outlook was expected, after the battle between the superpowers rumbled oil markets and was the catalyst for behind every downward price momentum last year.
2020 was an extraordinary year in many aspects. It witnessed the largest oil demand shock in history, that led producers to the largest oil production cut in history 9.7 million bpd equating to almost 10 percent of global supplies which aimed to balance the market over the medium-term.