The OPEC + group plans to reduce ongoing oil production cuts from January 2021, as initially agreed, the energy minister of OPEC’s third-largest producer, the United Arab Emirates (UAE) said on Tuesday.
Addressing the Energy Intelligence Forum, UAE Energy Minister Suhail al-Mazrouei said, as reported by Reuters:
“We, the OPEC + members, made a plan and that plan… started with a reduction of almost 10 or 9.7 million barrels (per day). This volume has been reduced and it will be reduced again at the end of this year as we walk through 2021. ”
OPEC and its Russian-led partners agreed in April to cut their combined oil production by 9.7 million barrels per day in response to falling demand following the coronavirus outbreak that has brought down oil prices. price. The cuts have been relaxed by 2 million bpd from August and are expected to be an additional 2 million bpd from January 2021.
According to the UAE minister of petroleum, “we believe this is the volume calculated to meet the returning demand.”
While OPEC No 3 has expressed confidence in the return of oil demand next year, OPEC itself and many analysts warn that the pace of the demand recovery could slow further with the increase in coronavirus cases in many countries.
Concerns over the timing of the pick-up in demand have reportedly prompted Saudi Arabia, the largest producer and de facto OPEC leader, to consider delaying the easing of production cuts, the Wall reported last week. Street Journal, citing Kingdom oil advisers.
In its Monthly Oil Market Report (MOMR) released on Tuesday, OPEC warned that the global economic recovery would likely stop at the end of this year and early next year, and reduce its annual growth projection. 2021 demand from 80,000 bpd to 6.5 million bpd.
“While the 3Q20 recovery in some economies has been impressive, the near-term trend remains fragile, amid a variety of ongoing uncertainties, particularly the near-term trajectory of COVID-19. As this uncertainty looms, against a backdrop of a sharp global rise in infections, the significant recovery in 3Q20 is not expected to continue in 4Q20 and into 2021, ”OPEC said today.
By Charles Kennedy for Oil chauffage
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