The picture shows the "OPEC+" joint technical committee held a meeting on March 30. | Image source: OPEC Twitter
According to Bloomberg , the joint technical committee of "OPEC+" held a meeting on March 30. The meeting report shows that "OPEC+", composed of OPEC and non-OPEC oil-producing countries, has lowered its global crude oil demand growth forecast this year from 5.9 million barrels per day to 5.6 million barrels per day. This sign of
shows that the global market is still concerned about the prospects for crude oil recovery. Therefore, the market generally expects that at the 15th "OPEC+" ministerial meeting held on April 1, major oil-producing countries will continue to maintain the current scale of production cuts in May. The joint technical committee of
"OPEC+" wrote in a report on Tuesday that crude oil inventories in major oil-producing countries around the world continue to decline, but are still higher than the average from 2015 to 2019, and the market supply and demand situation remains unbalanced. Therefore, "OPEC+" expects global crude oil demand to grow by 5.6 million barrels per day this year, a decrease of 300,000 barrels per day from previous estimates. The release of the report "OPEC+" comes as "OPEC+" oil-producing countries will "meet" discuss the allocation of crude oil production capacity in May on April 1. The lower expectations of global crude oil demand growth have set the tone for the upcoming meeting. Industry analysts expect that the alliance of oil-producing countries, led by , Saudi Arabia, and Russia, will not take more radical measures to increase production at present.
Bloomberg wrote an article to analyze that although the United States and Europe have launched large-scale vaccine injections, they still face the dilemma of vaccine shortage and rebound of the epidemic. "Growing crude oil demand will be much slower given the development of the coronavirus, especially in Europe," Tornquist, chairman and CEO of oil trader Gunvor, said in an interview with Bloomberg. "The market continues to be light on the outlook for global cross-border transportation. OPEC released its monthly market report in March stating that due to factors such as epidemic prevention and control measures taken in many places in Europe and high unemployment rates in the United States, the demand for crude oil market in the first half of this year will be lower than last year.
"Given this pessimistic outlook, it seems that the crude oil production quota will likely last for another month," Commerzbank analyst Weinberg told CNBC. Dickson, an analyst at energy consulting firm Rystad Energy, also said, "The crude oil market is still speculating on what supply policy will be adopted at the April 1 meeting." He further pointed out that the recent decline in Brent crude oil futures prices indicates that the market expects "OPEC+" to adopt a cautious and conservative attitude.
A source familiar with Russia's oil production policy told on March 29 that Russia may continue to support extended production cuts while seeking a smaller increase in production. In addition, according to sources, Saudi Arabia will extend its voluntary production cut policy of 1 million barrels per day to maintain oil prices.
"OPEC+" oil-producing countries decided to continue to maintain most of the production cuts until April, with Russia and Kazakhstan alone exempting them, with slightly increased production by 130,000 barrels per day and 20,000 barrels per day respectively. In addition, Saudi Arabia continued to implement an additional 1 million barrels per day voluntary production cut policy in April.
Author: Shen Qinhan
