OPEC + is considering delaying the increase in oil production

The Organization of Petroleum Exporting Countries and Partners (OPEC +) has lowered its forecast for oil demand in 2021, thereby showing support for tightening supply policy next year.

An oil extraction facility on the Kharkiv island of Iran. Photo: AFP / VNA

According to the OPEC + Joint Technical Committee (JTC) report, in 2021, oil demand will increase by 6.2 million barrels per day from last year, down 0.3 million barrels per day from the forecast. of the previous month. The JTC met online on November 16, ahead of the joint Ministerial Supervision Committee meeting on November 17.

The producer group OPEC + is expected to increase production by 2 million barrels a day by January 2021 – or 2% of global consumption – to ease supply cuts. However, as the demand is likely to weaken, OPEC + is considering delaying the production increase. One option that is receiving support from member countries is to keep output reduction at 7.7 million barrels / day for 3-6 months, instead of reducing it to 5.7 million barrels / day. in January 2021.

JTC is still considering both options. In the event that the cuts are extended until the end of March 2021, the Organization for Economic Co-operation and Development (OECD) commercial oil in 2021 will be above the five-year average of 73 million barrels. . In the case of the extension until June 2021, the OECD oil output for the following year will be 21 million barrels higher than the five-year average.

It is expected that OPEC + will meet on November 30 and next December 1 to decide production policy in 2021.