OPEC and other oil producers, a group known as OPEC+, are considering rolling over production cuts into April instead of raising output as a recovery in oil demand remains fragile due to the coronavirus crisis, three OPEC+ sources told Reuters on March 3.
OPEC+ ministers hold a full meeting on March 4.
The market has been expecting OPEC+ to ease production cuts by around 500,000 barrels per day (bbl/d) from April.
OPEC leader Saudi Arabia has also been expected to end its voluntary production cut of an additional 1 million barrels per day (MMbbl/d).
But three OPEC+ sources said on March 3 some key OPEC members had suggested keeping OPEC+ output unchanged.
It was not immediately clear whether Saudi Arabia would end its voluntary cuts or extend them, they said.
Oil prices jumped by about $1 per barrel on the news to trade near $64 per barrel.
On March 2, a document by OPEC+ experts, seen by Reuters, called for “cautious optimism” citing “underlying uncertainties in the physical markets and macro sentiment, including risks from COVID-19 mutations that are still on the rise”.
It said a recent oil price rally might have been caused more by financial players than improvements in market fundamentals.
OPEC expects global oil demand in 2021 to grow by 5.8 MMbbl/d to about 96 MMbbl/d. That would still be lower than demand in 2019 which was about 100 MMbbl/d.
Russia has been widely expected to push for more increases. But in February it failed to raise output despite being allowed to do so by OPEC+ as harsh winter weather hit output at mature fields.
JP Morgan, which said it spoke to Russia’s representative on the OPEC+ technical committee Denis Deryushkin, reported that Russia saw some rationale in raising output as the oil market was in a 500,000 bbl/d deficit.
“Russia believes that if output is maintained at current levels, the market would move into an even more severe deficit,” the bank said. “As such, production needs to be restored, but the speed and amount are yet to be decided.”
2022-05-18 - Research by DNV revealed that energy professionals believe that cyberattacks on the industry are likely to cause harm to life, property and the environment in the next two years.
2022-03-14 - To achieve this goal, "private capital and adequate regulations to provide legal certainty" will be needed, the company said in a statement.
2022-04-08 - Siccar Point’s owners have attempted to sell the company several times in recent years with no success, sources have told Reuters.
2022-03-30 - Capital investment, oil and gas production, and government revenue could fall if the next U.S. five-year offshore leasing program is delayed with its first sale pushed to 2028, report shows.
2022-03-30 - Canyon Creek Energy President and CEO Luke Essman recounts his company’s rebirth as the market crumbled underneath one of Oklahoma’s last build-and-flip acquirers.