Late Monday, an OPEC delegate told Bloomberg that the group has no plans to hold an emergency meeting to address the fall in the oil price. Earlier Monday, Nigeria’s oil minister and OPEC’s president said that OPEC has discussed convening an emergency meeting if the oil price continues its downward trajectory. It is unclear whether the delegate who spoke to Bloomberg was from Saudi Arabia or another OPEC Gulf state, but we see that as very likely.
The oil price followed the trajectory of the initial expectation of a meeting, which prompted the price to rise, followed by the delegate’s comments to Bloomberg, which prompted it to fall. Brent crude futures fell to $58.56/barrel by 8:00 a.m. GMT on Tuesday, and US crude returned to $48.97/barrel after rising above $50 on Monday afternoon.
After its annual meeting on November 27, in which Saudi Arabia and its Gulf peers maintained the group’s 30 M/bd output quota, OPEC said that an emergency session would not be called in Spring.
Market analysts who spoke to the FT Monday said it is highly unlikely that Saudi Arabia would agree to such a meeting. And in the final analysis, given that Saudi is the de facto leader of OPEC, it is Saudi’s ultimate decision whether or such a meeting would result in any price support action.