OPEC+ on Monday pledged action to support the global oil market amid growing concerns that a resurging number of COVID-19 infections could reverse demand recovery. Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said no one should doubt the alliance’s commitment to supporting the oil market. Meanwhile, three sources from other producing countries said a plan to ease supply cuts next year could be reversed if necessary.
OPEC+ has been curbing crude production since January 2017 to support prices and reduce a supply glut. For now, these producers are cutting output by 7.7 million bpd after slashing 9.7 million bpd on May 1 through August 1. They plan to relax the supply reduction by 2 million bpd starting from January 2021.
Analysts at JP Morgan have said a discouraging demand outlook could force OPEC+ to delay the planned production boost. Reuters reported that OPEC+ Joint Technical Committee considered some scenarios, including one that projects a surplus of 200,000 bpd in 2021. The committee, however, did not make any formal recommendation on adjusting 2021 policy ahead of the upcoming OPEC summit at the end of November.
