The Organization of Petroleum Exporting Countries and its allies (OPEC+) raised its forecast for world oil demand to 5.95 million barrels per day (bpd) in this year on expectations the pandemic will subside - Photo: Privacy

JAKARTA (TheInsiderStories) – The Organization of Petroleum Exporting Countries and its allies (OPEC+) raised its forecast for world oil demand to 5.95 million barrels per day (bpd) in this year on expectations the pandemic will subside, wrote the monthly report on Tuesday (04/13). The projection increased 6.6 percent than last month.

“The spread and intensity of the COVID-19 are expected to subside with the ongoing rollout of vaccination programmes, social distancing and travel limitations offering an increased mobility,” said the report.

In March, the allies has agreed to raise oil production gradually starting in May. The members to raise output by 350,000 barrels bpd until June then will cut the output by 400,000 bpd in July. Saudi Arabia considering another 250,000 bpd cuts in May and 250,000 bpd in June.

At the two-days meeting led by the chairman, Prince Abdul Aziz bin Salman, Saudi’ energy minister and co-chair, Alexander Novak, deputy Prime Minister of Russia, emphasized the ongoing positive contributions of the Declaration of Cooperation in supporting a rebalancing of the global oil market.

The ministers noted, the value of the prudent policy approach by Saudi Arabia to maintaining its additional voluntary adjustments of 1 million bpd in April 2021 for third month in a row. They also agreed to assess market conditions and decide onproduction level adjustments for the following month, with every adjustment being no more than 500,000 bpd.

They recognized the improvements in the market supported by global vaccination programs and stimulus packages in key economies but noted that the volatility observed in recent weeks warrants a continued cautious and vigilant approach in monitoring market developments. The block observed that in February, oil stocks in OECD countries fell for the seventh consecutive month, but still remained above the 2015 – 2019 average.

Overall conformity reached 115 percent in February 2021, reinforcing the trend of aggregate high conformity by participating countries. The ministers noted that since the April 2020 meeting, OPEC and non-OPEC countries had contributed to adjusting downward global oil supply by 2.6 billion bpd by the end of February 2021, which has accelerated the rebalancing of the oil market.

The ministers also agreed to the request by several countries that have not yet completed their compensation for an extension of the compensation period until the end of September 2021. In addition the countries with overproduced volumes will submit their plans for implementation of any required compensation for overproduced volumes to the organization by April 15, 2021.

Since OPEC+ production cuts began a year ago, the Saudis have single-handedly led the reductions, conceivably using US crude producers, to grow their oil exports at the expense of the kingdom. While, Iran has also been shipping with immunity to China since President Joe Biden came into office in January.

According to the 23-nations countries, the production levels could still be adjusted at the next meeting on April 28. Following the OPEC+ meeting resulted, the crude prices swung more than 2 percent. London-traded Brent crude price settled up 2.1 percent to US$64.86 per barrel and New York-traded West Texas Intermediate oil price jumped by 3.9 percent to $61.45.

Written by Editorial Staff, Email: theinsiderstories@gmail.com