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OPEC + ministerial meeting discusses gradual increases in production over the next three months, sources say, as the group still debated at 11:10 a.m. EDT on Thursday how to proceed with its supply management policies in petroleum.
The OPEC + alliance is debating an increase in its oil production of 350,000 b / d in May and June and 400,000 b / d in July, a source said. Reuters.
The market more or less expected a postponement of current cuts or a slight increase given the recent weakness in oil demand with European lockdowns and with Saudi Energy Minister Prince Abdulaziz bin Salman, reiterating calls for a cautious approach today.
At the start of the closed-door session, senior ministers from Russia and Saudi Arabia spoke at the opening of the meeting and held somewhat divergent views. Russia appeared more optimistic about the recovery in oil demand and the market as a whole, while Saudi Arabia hinted at a very cautious approach.
The situation on the world oil market has improved since the OPEC + meeting last month, Russian Deputy Prime Minister Alexander Novak said in his speech.
But the Saudi minister said that “until the evidence of the recovery is overwhelming, we must maintain this cautious stance.”
The Saudi remarks led analysts to assume that there would be another postponement of the current cuts.
As the meeting progressed into the closed session for reporters, the media began to report various sources saying there would be an increase in the group’s production over the next three months.
Saudi Arabia has also reportedly presented a plan to ease its further unilateral reduction of 1 million bpd over the summer. According to OPEC + sources, the Kingdom will unwind its voluntary supplement of 1mn b / d cut by 250kb / d in May, 350kb / d in June and 400kb / d in July.
Oil markets continue to react with mixed feelings to the results of the OPEC + meeting, with benchmarks WTI and Brent rising as much as 2% the day before the news broke but giving up some little gains. time after the group decided to gradually increase oil. production over the next three months.
OPEC + ‘s decision to increase oil production by around 1 million bpd over the next three months may seem bearish to some, but given the increased demand for petroleum products in the United States and in Asia this summer, it seems that a slight increase in production is the most acceptable decision. for most parties.
By Tsvetana Paraskova for OilUSD
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