OPEC+ Expected to Stay the Course on Oil Output Plans

OPEC+ is expected to rubber stamp a planned output increase of 400,000 barrels per day (bpd) in December. Reuters
OPEC+ is expected to rubber stamp a planned output increase of 400,000 barrels per day (bpd) in December. Reuters
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OPEC+ Expected to Stay the Course on Oil Output Plans

OPEC+ is expected to rubber stamp a planned output increase of 400,000 barrels per day (bpd) in December. Reuters
OPEC+ is expected to rubber stamp a planned output increase of 400,000 barrels per day (bpd) in December. Reuters

An OPEC+ committee largely stuck to forecasts of a strong demand rebound this year and next ahead of a meeting next week, at which the group is expected to rubber stamp a planned output increase of 400,000 barrels per day (bpd) in December.

The Joint Technical Committee (JTC), which met on Thursday, now expects oil demand to grow by 5.7 million bpd in 2021, 120,000 bpd below OPEC's forecast in its latest monthly report, two OPEC+ sources told Reuters.

The JTC left its demand forecast for next year steady at 4.2 million bpd, one of the sources said.

That source said the revision for 2021 was "nothing to worry about" because it was an update of actual data and rounding.

OPEC+ forecasts are still higher than those of the International Energy Agency (IEA), which expects oil demand to grow by 5.5 million bpd in 2021 and 3.3 million bpd in 2022.

Ministers from the Organization of the Petroleum Exporting Countries (OPEC), Russia and their allies - collectively known as OPEC+ - meet on Nov. 4 to decide output policy.

This week Russian Deputy Prime Minister Alexander Novak told Reuters he expected OPEC+ to go ahead with its planned increase for December, as previously agreed.

"Demand (for oil) can decline as there is still uncertainty. We also see there is yet another pandemic wave spreading across the world," Novak said.

That view was echoed by other ministers in the group.

"The situation of the oil market indicates that the increase in December ... should not exceed 400,000 bpd," state news agency APS quoted Algerian Energy Minister Mohamed Arkab as saying on Thursday.

Oil prices were trading above $84 a barrel on Friday, within sight of a three-year high of $86.70 hit this week.

Saudi energy minister Prince Abdulaziz bin Salman twice dismissed calls this week by major consumer nations to speed the rate of OPEC+ production increases, saying the group does not expect crude oil shortages in the market.

"With OECD commercial oil inventories 5.4% below the five-year average and demand rapidly normalizing, OPEC+’s preference to keep production policy unchanged reflects an alliance that is significantly more tolerant of higher prices," JP Morgan said in a note.



Fitch Ratings Affirms Saudi Arabia's Credit Rating at 'A+' with Stable Outlook

The King Abdulaziz Center for World Culture is lit up on the occasion of Saudi national day. (SPA file)
The King Abdulaziz Center for World Culture is lit up on the occasion of Saudi national day. (SPA file)
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Fitch Ratings Affirms Saudi Arabia's Credit Rating at 'A+' with Stable Outlook

The King Abdulaziz Center for World Culture is lit up on the occasion of Saudi national day. (SPA file)
The King Abdulaziz Center for World Culture is lit up on the occasion of Saudi national day. (SPA file)

Fitch Ratings affirmed on Friday Saudi Arabia’s credit rating at "A+" with a Stable Outlook, according to a recent report.

The agency stated that the rating reflects the strength of the Kingdom’s financial position. It noted that Saudi Arabia’s debt-to-GDP ratio and sovereign net foreign assets are significantly stronger than the "A" and "AA" rating category medians.

It also highlighted that the Kingdom holds substantial financial reserves in the form of deposits and other public sector assets.

Fitch expects sovereign net foreign assets to remain a core credit strength, reaching 35.3% of gross domestic product (GDP) in 2027 - a high ratio compared to the "A" median of 3.1% of GDP.

The agency also highlighted the Kingdom’s ongoing fiscal reforms, which aim to enhance the public budget's resilience to oil price fluctuations. These reforms, along with the continued improvement in non-oil revenues, are seen as supportive of Saudi Arabia’s credit profile.