OPEC’s secretary general said the oil market is on the way to balance as the demand progressively rising, a few days before the OPEC+ scheduled a key meeting to decide the continuity of productions curbs in August. The OPEC+ has imposed an output cut of 9.7 million barrel/day since the global pandemic hit oil demand and collapsing prices. After July, the cuts are projected to lower by 7.7 million barrel/day until December, but the final decision will be taken after the meeting. The OPEC’s panel of Joint Ministerial Monitoring Committee (JMMC) is meeting this week to discuss recommendations for the next phase of cuts.
While the supply cuts have helped reverse a rapidly rising trend in inventories, the reopening of the economies around the world provided a much-needed comeback in demand, said OPEC’s Mohammad Barkindo. He added that trends in supply and demand are helping step by step closer to achieving a balanced market, and opined that drastic changes to the OPEC+ deal are unlikely.
On the other hand, OPEC sources have leaked last month that OPEC and Russia will likely ease the cuts from August, as oil has recovered from a 21-year low below $16 in April to almost $43 a barrel in current prices. If such, the real production increases, possibly less than 2 million barrel/day, as nations who had low compliance in previous agreements like Iraq have promised to make up for their cuts in May and June.
Another source also said that Saudi Arabia’s August oil exports in will settled on the same volume as July as the production surplus will be used for fulfilling domestic demand.
