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Oil expects OPEC + to comply and not increase production

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The meeting of OPEC + (the Organization of the Petroleum Exporting Countries plus the rest of the large producers that do not belong to the cartel, led by Russia) takes place this coming Monday, November 30, and on Tuesday, December 1, to decide what to do with oil production next year.

The Brent barrel arrives at this appointment in highs since March after rising strongly this week buoyed by the good news about the vaccine and political advances in the United States. In November, oil has soared more than 30%, encouraging the sector. Repsol, for example, He has seen his shares recover more than 50% in the month.

The group made up of OPEC and Russian-led exporters is expected to raise production by 2 million barrels per day (bpd) in January – 2% of world consumption – as part of a reduction in record cuts to pumping applied in 2020. However, OPEC and its allies appear to be leaning for delaying the increase in its oil pumping in 2021 to support the market, still very weak amid the second wave of Covid-19, according to Reuters reports. This, despite these remarkable increases that prices have experienced in the last month.

Russia is likely to agree a renewal of the current installments for the first quarter if necessarya source familiar with the matter told Reuters. "It seems the extension is needed," the source commented, citing "possible price drops and uncertainties in demand"in the middle of the second wave of the virus.

It is planned that this Saturday OPEC + hold informal talks before next week's appointment. Russian news agencies reported that Deputy Prime Minister Alexander Novak will attend the meeting. Novak was energy minister until earlier this month, leading Moscow's efforts to forge close ties with OPEC and close the deal on production cuts.

"OPEC and its allies are expected delay three months the increase of 2 million barrels per day expected for January. (…) As always, there is uncertainty about how the decision may affect (oil) prices in the short term, "says Neil Wilson, director of research at Markets.com

Craig Erlam, Oanda Expert, does not take the agreement for granted and recalls the price war in which large producers embarked at the beginning of the pandemic. "Big players aren't averse to gambling. I mean, they embarked on a price war early in the pandemic, in what turned out to be a horrible miscalculation on their part. Will they play safe this time?" He wonders. .

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