OPEC+ oil producers will discuss a modest easing of oil supply curbs from April given a recovery in prices.

This is coming, although some suggest holding the oil production steady for now given the risk of new setbacks in the battle against the covid-19 pandemic.

Meanwhile, the Organization of the Petroleum Exporting Countries and allies, cut output by a record 9.7 million barrels per day last year as demand collapsed due to the pandemic. As of February, it is still withholding 7.125 million barrels per day, about 7% of world demand.

In January 2021, OPEC+ slowed the pace of a planned output increase to match weaker-than-expected demand due to continued coronavirus lockdowns. Saudi Arabia made extra voluntary cuts for February and March.

Three OPEC+ sources said an output increase of 500,000 barrels per day from April looked possible without building up inventories, although updated supply and demand balances that ministers will consider at their March 4, 2021 meeting will determine their decision.

“The oil price is definitely high and the market needs more oil to cool the prices down,” one of the OPEC+ sources said. “A 500,000 bpd increase from April is an option – looks like a good one.”

A rally in prices towards $67 a barrel, the highest since January 2020, the rollout of vaccines and economic recovery hopes have boosted confidence the market could take more oil. India, the world’s third biggest oil importer, has urged OPEC+ to ease production cuts.

Saudi Arabia’s voluntary cut of 1 million barrels per day (bpd) ends next month. While Riyadh hasn’t shared its plans beyond March, expectations in the group are growing that Saudi Arabia will bring back the supply from April, perhaps gradually.

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