Opec+ sticks with plans to gently hike supply as demand recovers

Bloomberg

The Organisation of Petroleum Exporting Countries (Opec) and its allies recommended proceeding with plans to gently revive oil production as global demand recovers from the pandemic, despite surging infections in India.
A committee led by Saudi Arabia and Russia agreed the coalition can skip a full-scale ministerial meeting originally scheduled for Wednesday, and press on with its road-map for increasing supply, delegates said. The 23-nation alliance intends to restart about 2 million barrels of daily output over the next three months.
World oil consumption will rebound by a vigorous 6 million barrels a day this year, though the recovery remains at risk from virus outbreaks in India and Brazil, a panel of Opec+ technical experts forecast. As a result, the glut of oil inventories that amassed when demand collapsed last year will be almost gone by the end of this quarter.
“We can take comfort in knowing that our leadership has helped turn the tide,” Mohammad Barkindo, secretary-general of the Organisation of Petroleum Exporting Countries, said on Twitter. “But at the same time, the persistence of Covid-19 reminds us that this no time to stray from the cautious and steadfast approach we have taken over the past year.”
Russia’s Deputy Energy Minister Alexander Novak said Tuesday that there’s optimism in the oil market and global mobility is increasing. Nevertheless, Opec+ must keep monitoring the coronavirus situation across many regions, including Asia, he said on the state-run Rossiya 24 television network.
The committee expects that global fuel stockpiles will decline at an average rate of 1.2 million barrels a day this year, compared with an estimate of 800,000 a day last month.
As a result, the surplus in oil inventories — relative to their 2015 to 2019 average — will be whittled down to just 8 million barrels by the end of this quarter, according to the JTC’s data. Depleting the world’s bloated stockpiles is one of Opec’s main objectives.
When the pandemic crushed fuel demand last year, the 23-nation alliance led by Saudi Arabia and Russia rescued the global oil industry from an unprecedented price rout by slashing production. The Organisation of Petroleum Exporting Countries and its partners are now in the process of carefully restarting those supplies as economic
activity resumes.