OPEC and its allies will meet on Thursday as they consider extending production cuts into next month as demand for oil remains stalled because of the coronavirus crisis, despite a sense of optimism over a post-pandemic recovery. The oil market has been expecting OPEC and other oil producers, a group called OPEC+, to lower production cuts by 500,000 barrels per day (bpd) from April, but some OPEC members pushed for keeping limits on output intact, according to sources privy to the matter.
The COVID-19 pandemic had brought oil prices down to their lowest ebb in the last year, only to gather steam after inoculation campaigns kicked off across the world, industry expert Bashir Alya told KUNA, drawing a link between recovery in crude prices and measures to curb the pandemic.
The talks are expected to focus on efforts to achieve market “balance and stability” added the expert, saying such a scenario is needed to ensure that the global economy remains firmly on the path towards recovery from the pandemic. In the event COVID-19 vaccine rollouts succeed in taming the pandemic, then the global economy will be on track for a major recovery by summer in the “best-case scenario,” said Heinz Gartner, an economic expert, pointing out that the fight against the pandemic remains in its infancy.
Oil prices had risen to USD 60 bpd last month on growing optimism about COVID-19 vaccinations, as OPEC expects global oil demand to rise by 5.8 million bpd to around 96 million bpd this year.