Oil price jumps before crunch OPEC+ supply talks

DUBAI: The price of crude oil jumped on Monday as hopes rose that OPEC+ would strike a deal to curtail extra supply until well into next year.

Energy ministers from the alliance of exporters led by Saudi Arabia and Russia meet on Tuesday to monitor markets and output levels, amid speculation that a production increase of 2 million barrels per day in January would be delayed for at least three months, and perhaps as long as six months. Brent crude leapt 4 percent to nearly $45 per barrel.

“It looks as though a significant ‘tweak’ is a distant possibility,” said one oil official, in a reference to comments by Saudi Energy Minister Prince Abdul Aziz bin Salman that the Kingdom and other OPEC+ members would be flexible on the timing of the new output level.

Compliance with the historic cuts announced in April is running at more than 100 per cent for a third consecutive month. A formal decision to alter January supply levels would have to be approved at a full meeting of OPEC at the end of the month.

A stronger oil outlook and improving economic conditions were factors in Saudi Aramco’s announcement that it will seek a multibillion-dollar capital injection from international markets.

The world’s biggest oil company told the Riyadh stock exchange it had hired major banks for its latest bond issue, following a record-breaking $12 billion foray into global markets last year.

Aramco, one of the few oil companies to remain profitable amid the pandemic crisis, is committed to annual dividend payments of $75 billion to investors who bought its first shares last year.