2021 was scheduled to promote a sustained recovery in oil demand and mobility, particularly with the start of vaccination campaigns against the coronavirus. OPEC + is concerned that the new variant of the virus will cloud this prospect.
On February 2, the OPEC + Joint Technical Committee (JTC) met by video conference to discuss issues relating to the outlook for the world oil market. According to his estimate, global oil demand is expected to increase by 5.6 million barrels per day this year, contrary to a previous forecast which forecast growth of 5.9 million barrels per day.
This downward revision is mainly due to the appearance of new variants of Covid-19 and its potential impact on mobility and therefore demand. Despite the vaccination campaigns that have started and which had allowed the barrel to rebound, this new development of the pandemic makes the players in the sector suspicious.
Mohammad Barkindo, general secretary of OPEC, noted that the crude market is “currently in recession” and still hopes that 2021 will be a successful year for aggregate demand. In addition, several members of the cartel having committed to respecting the reduction quotas in order to regain a certain stability between supply and demand, did not adhere to 100% of the quotas at the end of December 2020.
The production then exceeded the required levels of 72,000 barrels per day on average. The best student of the group is undoubtedly Saudi Arabia which intends to unilaterally reduce its production by 1 million barrels per day in February and March, which could bring to 10 million barrels per day, all production cuts. of the group.
Prices are expected to rebound significantly during this period.
Source Ecofin Agency