OPEC+ maintains current output policy

The Organization of the Petroleum Exporting Countries (OPEC) and its allies have agreed to still apply the policy of gradually increasing output by pumping an additional 400,000 barrels per day into the market in October.

In 2020, OPEC + agreed to cut production by a record of nearly 10 million barrels per day when oil demand plunged to the bottom because of the Covid-19 pandemic. Photo: AFP

The decision was made by OPEC and its allies (collectively known as OPEC +) at a policy meeting on September 1, despite US pressure on the alliance to increase production faster to support the economy. global recovery.

Previously, OPEC + made a similar decision in July to gradually increase production by adding 400,000 barrels of oil per day in a month. The policy of increasing production by 400,000 bpd is still being applied by OPEC + this September. For rescue the bottom oil price because of the Covid-19 pandemic, nIn 2020, OPEC+ agreed to cut production by nearly 10 million barrels per day.

Assess the current market situation, OPEC+ said: “The impact of the Covid-19 pandemic continues to cause uncertainty while market fundamentals have strengthened and OECD oil inventories continue to decline as the recovery in demand strengthens.”

Contrary to the expected 1.6 million barrel drop, US gasoline stocks last week increased by 1.3 million barrels, according to the US Energy Information Administration (EIA).

Analysts say an increase in Covid-19 cases will drag down oil demand in the US in the coming weeks along with a seasonal drop in demand as the summer tourist season ends.

Meanwhile, US crude inventories last week fell deeper than expected, falling by 7.2 million barrels to 425.4 million barrels. US crude oil prices are forecast to continue to be under pressure as offshore oil production in the Gulf of Mexico gradually recovers. Still, analysts say it could take weeks for Louisiana refineries to get back up and running after Hurricane Ida.

In a related move, OPEC+ experts raised their forecast for oil demand growth in 2022 to 4.2 million barrels per day (bpd), significantly higher than the previous forecast of 3. 28 million bpd, by Reuters news agency.

For 2021, OPEC+ forecasts a global oil demand increase of around 5.95 million bpd following a record drop of around 9 million bpd in 2020 due to the Covid-19 pandemic.

The decision to raise the forecast for oil demand growth was made when the OPEC+ Joint Technical Committee (JTC) met on August 31 and presented an updated report on the situation of the oil market for the period 2021. – 2022.

Reuters news agency, citing several OPEC+ sources, said the report has not been released, but forecast a shortfall of about 0.9 million bpd in 2021 as global demand recovers.

The initial report of the OPEC+ Joint Technical Committee estimated a surplus of 2.5 million b/d in 2022, but has since been revised to a smaller surplus of 1.6 million b/d due to expected demand. expected to grow stronger.

OPEC + is expected to continue meeting to discuss policy in the meeting on October 4.