OPEC chief sees oil market ‘moving closer to balance’

- Advertisement -

LONDON/DUBAI- The oil market is getting closer to balance as demand gradually rises, OPEC’s secretary general said a day before the group and ally Russia meet to decide whether to ease output curbs from August.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, have been cutting output since May by 9.7 million barrels per day after the coronavirus crisis destroyed a third of global demand and caused a price collapse.

After July, the cuts are due to taper to 7.7 million bpd until December although a final decision has yet to be taken. A panel called the Joint Ministerial Monitoring Committee (JMMC) meets on Wednesday to recommend the next level of cuts.

- Advertisement -

“The gradual reopening of the economies and societies around the world has provided a much-needed resurgence in demand,” while the supply cuts “have helped reverse a rapidly rising trend in inventories,” OPEC’s Mohammad Barkindo said.

“These supply and demand trends are helping bring us step by step closer to achieving a balanced market.”

The assessment from Barkindo during a webcast presentation on Monday, suggests drastic changes to the OPEC+ deal are unlikely. He did not comment directly on whether the producers would ease the supply cut.

Still, OPEC+ sources told Reuters last month OPEC and Russia will likely ease the cuts from August.

Oil has recovered to almost $43 a barrel from a 21-year low below $16 in April.

The real production increase could be less than 2 million bpd given Iraq and others promised to over-comply to make up for not delivering all of their cuts in May and June.

Author

- Advertisement -

Share post: