May 24, 2022

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Expectations of “OPEC +” oil production plans remain unchanged

A group of “OPEC +” allies, including the Organization of the Petroleum Exporting Countries (OPEC) and its allies, had high expectations for a strong recovery in demand this year and next, ahead of a meeting next week. OPEC + ”is expected to agree to the planned increase in production. 400,000 barrels a day in December.

OPEC +’s joint technology team, which met yesterday, expects demand growth to be 5.7 million barrels per day by 2021, 120,000 barrels lower than the OPEC forecast in its latest monthly report.

The committee estimated that next year’s demand will be 4.2 million barrels a day, a source said.

The source added that the revision of growth estimates in 2021 “does not need to worry” because it acts as an update to the data.

OPEC +’s expectations are even higher than the International Energy Agency’s estimates that oil demand will increase to 5.5 million barrels per day in 2021 and 3.3 million barrels per day in 2022.

Meeting

Ministers of the Organization of the Petroleum Exporting Countries (OPEC), Russia and their allies are meeting on November 4 to decide on production policies.

Russian Deputy Prime Minister Alexander Novak told Reuters this week that he expects OPEC + to continue with the planned increase from December, as previously agreed.

Demand (for oil) may continue to decline due to continued uncertainty, and we see another wave of epidemics spreading around the world.

Other ministers expressed similar views.

The increase in OPEC + crude oil production should not exceed 400,000 barrels a day, Algerian Energy Minister Mohamed Arkab was quoted as saying by the Algerian News Agency yesterday.

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Oil prices traded above $ 84 a barrel yesterday, close to a three-year low of $ 86.70.

Twice this week, Saudi Energy Minister Prince Abdul Aziz bin Salman rejected calls from major consumer countries to increase OPEC + production, saying the group did not anticipate a shortage of crude oil in the market.

J Bank said. “OPEC +’s willingness to keep production policy unchanged reflects a more welcoming alliance with higher prices, as commercial oil stocks in OECD countries are down 5.4% above the 5-year average and demand is rapidly returning to normal,” JPMorgan said in a statement.

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