• OPEC and allies meet today
• Oil price rises ahead of meeting

Frank Kane

DUBAI: The Kingdom’s Energy Minister Prince Abdul Aziz bin Salman again urged caution and vigilance among fellow ministers in the OPEC+ alliance of oil producers, as they met to consider the next crucial steps for global crude markets.

The virtual meeting, organized from OPEC’s Vienna headquarters, is to decide whether or not to raise production levels in the face of a strong recovery in the oil price over the past month.

Brent crude, the global benchmark, jumped over $65 a barrel as the prince was speaking.

“I have said for a long time that recovery in global oil demand is closely linked to vaccine acceptance and the speed at which these vaccines are being rolled out around the world,” he said. “The uncertainty surrounding the pace of recovery has not receded. Against this background – and at the risk of sounding like a stuck record – I would once again urge caution and vigilance.”

Some OPEC+ members, notably Russia and Kazakhstan, want to increase production next month. Others want to keep the current level of cuts in place until the recovery in demand becomes more apparent.

Saudi Arabia is also considering whether or not to halt the additional and voluntary cut of a million barrels a day it announced in January, a move credited with sparking the recent strong price rise but which expires at the end of the month.

“The right course of action now is to keep our powder dry, and to have contingencies in reserve to insure against any unforeseen outcomes”, the prince said.

Analysts took his remarks to indicate that Saudi Arabia might consider rolling over at least some part of that cut for at least another month.

“We have elected for a careful and proactive approach that has proved successful. Before we take our next step forward, let us be certain that the glimmer we see ahead is not the headlight of an oncoming express train,” the energy minister said.

The level of compliance with OPEC+ agreed targets was 103 percent in February, according to OPEC officials. Some producers, notably Nigeria, have stuck to the agreement to compensate for past over-production.

“Compliance levels have remained at the historically high levels that have been a hallmark of our joint endeavor. The list of countries on the compensation schedule continues to shorten, and I truly commend Nigeria for completing its compensation,” the prince said.