Tuesday, April 13, 2021
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Home Breaking News OPEC + Alliance Members Call For Caution

OPEC + Alliance Members Call For Caution

OPEC Secretary General Mohamed Barkindo urged the countries of the OPEC + alliance to be cautious, despite positive changes in the oil market.

According to the cartel secretary general, despite the fact that there were many positive developments in the past month, it also contained reminders of the continuing uncertainty and instability caused by the COVID-19 pandemic, Interfax reports, citing an OPEC statement following a meeting of the technical monitoring committee ( JTC).

As the director of the Academy of Finance and Investment Management Arseny Dadashev noted earlier, “the attention of traders is now shifting to the OPEC + meeting, which will take place on April 1”.

“A meeting of the monitoring committee will be held the day before. Citing the recent resumption of lockdowns in Europe, market participants are betting that the alliance will maintain current production restrictions in May, ”the expert said in his review.

Let us also recall that at the end of the first quarter of 2020, several waves of falling prices for “black gold” swept across the world oil market. The negative situation was caused by a whole range of factors: a general overproduction of raw materials, a sharp drop in demand amid the rapid spread of the coronavirus infection COVID-19 (a pandemic was announced on March 11) and concerns about its impact on the global economy, as well as the collapse of the OPEC + deal (officially from April 1, but in fact after fruitless negotiations between the oil-producing countries at a meeting on March 6 in Vienna).

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However, on April 12, the OPEC + countries agreed on a new deal, in which 23 states became participants. The agreement is designed for 2 years – from May 1, 2020 to May 1, 2022. The new OPEC + deal was a forced reaction of oil-producing countries to the market situation and pressure from the United States. However, in general, it did not cover the volumes of the decline in global demand, and besides, huge reserves of raw materials have accumulated on the market.

During 2020, the OPEC + countries held meetings, adjusting the parameters of the transaction taking into account the situation on the global oil market – starting in May to reduce oil production by 9.7 million barrels per day, in August they relaxed the restrictions to 7.7 million for the period until the end 2020 year.

On January 4-5, 2021, the ministers of the OPEC + countries made a compromise decision, according to which, from February, Saudi Arabia will voluntarily reduce oil production by almost 1 million barrels per day within two months, to about 8.125 million barrels per day, and a few more OPEC member countries will cut production by two months by a total of 425 thousand barrels per day. At the same time, Russia and Kazakhstan got the opportunity to increase production in February and March.

On March 4, following the results of the next meeting, the OPEC + participants unexpectedly decided to maintain the current level of oil production for all countries of the alliance, except for Russia and Kazakhstan, which will be able to increase production by 130 thousand and 20 thousand barrels per day from April, respectively.

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