Sources in “OPEC +” said that the group of oil-producing countries met on Monday to discuss expectations of weak demand in light of the high incidence of “Corona” virus and increased production in Libya, but it is unlikely to recommend immediate action. A joint ministerial monitoring committee is scheduled to meet, including the two major producers Saudi Arabia and Russia.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, as part of the so-called “OPEC +”, have been reducing production since January 2017 in an effort to balance the market, support prices and reduce stocks. The group is currently curbing production by 7.7 million barrels per day, down from 9.7 million barrels per day, and cuts are set to narrow by 2 million barrels per day by January.
Several OPEC observers, including analysts from the American investment bank JP Morgan, say that the pessimistic outlook for demand may push OPEC + to postpone any reduction in cuts. But the UAE and Russia have said the cuts will be cut as planned. The group meets again on 30 November.
Last week, OPEC + experts discussed the risks of continuing oversupply in 2021 in the event of the outbreak of a second, fatal and prolonged wave of the Covid-19 pandemic. “The demand in itself still appears weak,” said Mohamed Barkindo, OPEC Secretary-General, last week. (Reuters)