The high number of COVID-19 infections could derail oil demand recovery
OPEC + members are concerned that the rising number of new infections in India, Brazil and Japan could derail oil demand recovery.
Ministers of the Market Surveillance Committee members of the Organization of the Petroleum Exporting Countries (OPEC) and partner countries, also known as OPEC +, have just met to discuss production policy in the context of the forecast. Energy demand will recover despite the complicated ongoing COVID-19 epidemic in India, Brazil and Japan.
The above committee has decided to maintain the policies that the group agreed to at the April 1 meeting. The sources said OPEC + will gradually loosen restrictions on oil production from May to July in the context of a recovery in global oil demand.
Previously, OPEC + cut about 8 million barrels of oil production per day, equivalent to more than 8% of global demand. This includes 1 million bpd, which Saudi Arabia voluntarily cuts. However, at the meeting on April 1, OPEC + agreed to increase production by 2.1 million barrels / day from May to July.
In a report by OPEC + experts, the 2021 global demand forecast is forecast to increase by 6 million barrels a day after falling to 9.5 million barrels a day in 2020. However, the group said Even when more than 1 billion doses of COVID-19 vaccine have been injected worldwide, the soaring number of new infections in India, Brazil and Japan could derail oil demand recovery.
OPEC + expects commercial oil stocks to reach 2.95 billion barrels in July, well below the 2015-2019 average, and hopes to remain this low for the rest of the year.
The next OPEC + Ministerial Meeting could be scheduled for early June.