OIL NEEDS A SOLUTION

PLATTS - 30 Mar 2021 - Saudi Arabia has not yet decided its position on OPEC+ oil production quotas, a Saudi Arabian source told S&P Global Platts on March 30, two days ahead of the bloc's meeting to decide on May output levels.

The source denied a report that the kingdom was prepared to support extending the bloc's output cuts through June while maintaining its own voluntary 1 million b/d cut, saying it "had no basis." He added that OPEC+ consultations had yet to begin, making it premature to assume an outcome.

Faltering oil prices in recent days after a weeks-long surge to around $70/b have many analysts forecasting that the OPEC+ group of producers may largely roll over their quotas for at least another month.

While setting OPEC+ quotas requires unanimous consent among the coalition's nearly two dozen members, Saudi Arabia's voluntary cut is a unilateral decision.

The OPEC+ talks will begin with a March 31 virtual meeting of the Joint Ministerial Monitoring Committee, cochaired by Saudi Arabia and Russia, before all 23 OPEC+ ministers convene online April 1.

The alliance's current quotas are keeping more than 7.1 million b/d of crude production off the market, with Saudi Arabia adding its extra 1 million b/d cut on top.

Under the terms of its agreement, the bloc can adjust its output caps by up to a combined 500,000 b/d each month.

At its last meeting March 4, OPEC+ surprised traders by choosing to keep production levels steady through the end of April, except for a slight increase granted to Russia and Kazakhstan.

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