Fresh Lockdowns Impacting Oil Demand Recovery – OPEC+
The Organisation of the Petroleum Exporting Countries and its allied have lamented the impact of the resurgence of COVID-19 cases in major economies on crude oil demand.
The Joint Ministerial Monitoring Committee of OPEC and its Russia-led allies, a group known as OPEC+, held its 24th meeting via videoconference on Tuesday.
A statement by OPEC said the committee reviewed the monthly report prepared by its Joint Technical Committee and developments in the global oil market since its last meeting on October 19, 2020, with particular focus on the prospects for the first half of 2021.
The committee emphasised the ongoing positive contributions of the Declaration of Cooperation in supporting a rebalancing of the global oil market in line with the historic decision in April to adjust downwards overall crude oil production.
It noted the robust demand in Asia and the positive news of possible vaccines against the COVID-19 virus.
The JMMC said, “These developments have been overshadowed by the resurgence of COVID-19 cases in major economies.
“The committee noted that more stringent COVID-19 containment measures across continents, including full lockdowns, are impacting the oil demand rebound and that the underlying risks and uncertainties remain high.”
It said all participating countries needed to be vigilant, proactive and be prepared to act, when necessary, to the requirements of the market.
The committee reviewed the crude oil production data for October 2020 and welcomed the positive performance in the overall conformity level for participating OPEC and non-OPEC Countries, at 101 per cent.
It noted that between May and October, participating OPEC and non-OPEC countries had contributed to reducing the global supply by approximately 1.6 billion barrels, including voluntary adjustments, adding that this had been key to the rebalancing of the market.
“Moreover, countries compensated a total of 768,000 barrels per day to make up for previously overproduced volumes. This led to achieving a level of 99.5 per cent of the production adjustment commitments since May,” it said.
The committee expressed its appreciation to the participating countries, particularly to the UAE and Angola, which had performed beyond expectation.
It reiterated the critical importance of adhering to full conformity and compensating the overproduced volumes, in order to achieve the objective of market rebalancing and to avoid undue delay in the process.