Financial Event: OPEC Meeting
What is OPEC and the OPEC meeting?
The Organization of the Petroleum Exporting Countries is an intergovernmental organization of 15 nations, founded in 1960 in Baghdad by the first five members, and headquartered since 1965 in Vienna, Austria.
The OPEC meeting
is a twice-yearly session in which the organisation sets oil production quotas for each of its 15-member oil exporting countries. These quotas are significant because they affect the global supply of oil and, in turn, its price.
OPEC Meeting Dates
Ordinary OPEC meetings take place two times a year at the Secretariat building which serves as the headquarters of the organization.
Extraordinary meetings can be scheduled only if a member country requests it and has received the approval of the majority of OPEC members.
The next OPEC and non-OPEC Ministerial Meeting will convene on 04 March 2021
The outcome will be announced at 5pm (UK time) on the day of the meeting.
Decisions are announced via press conference on the day of each meeting whilst most decisions take effect 30 days after (except where another date is agreed or the decision is vetoed by a member before it is implemented).
Both monthly and annual oil market reports, including an annual world oil outlook report which assesses the future for oil are published by OPEC.
Latest Meeting Updates
After a summer lull, the autumn energy meeting and events calendar ramped up into full swing during September. Two of the focal points were the World Energy Congress (WEC) and the 16th
Meeting of the OPEC-non-OPEC Joint Ministerial Monitoring Committee (JMMC), both of which were held in Abu Dhabi during the week of September 9–13. Then on September 14, the 5th
Iraq Energy Forum was held in Baghdad.
How does the OPEC meeting affect investors?
Members of OPEC hold more than two thirds of proven crude oil reserves worldwide. At the moment of this writing, OPEC supplies about 44% of the world’s oil. Production quotas set by OPEC can strongly impact the global supply of oil and affect its price. Other energy markets can indirectly be affected as a result of changes in the global supply of oil.
Because of this, the OPEC meeting is a vitally important date for the majority of traders.
How does OPEC change the Oil Price?
By adjusting the volumes of oil supply.
If the price of oil is desired to rise then production quotas are revised downwards to limit supply. On the opposite, if the OPEC desires a lowering of the price of oil production quotas are revised upwards to allow for more supply. If demand for oil stays constantly at the same levels then it is assumed the price of oil will move in the intended direction
Major oil producers who are not members can attend OPEC meetings with non-voting observer status to better coordinate global oil production levels. In January 2017, several non-members agreed with OPEC to limit supply until March 2018.
Recently OPEC has difficulty regulating oil prices because global supply and demand levels have shifted and tilted. For example, the increase in US shale oil production has reduced demand for OPEC producer’s oil. As an effect, this has lowered global prices despite the fact that China’s oil needs have grown exponentially. Short lived spikes in prices can still happen occasionally as a result of global catastrophes or crises which cause instability and future supply uncertainty that in turn causes oil demand to rise for a short time.
Before speculating on oil prices, it would be beneficial to all traders to closely study and examine other economic data and news sources in conjunction to the latest OPEC meeting quotas.
Find out more on the OPEC Long-Term Strategy