OPEC+ 'optimistic' for 2021 rebound in oil demand

Agence France-Presse

Posted at Feb 04 2021 07:11 AM

OPEC+ 'optimistic' for 2021 rebound in oil demand 1
The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France September 17, 2019. Christian Hartmann, Reuters/file

LONDON - Members of the OPEC group of oil producers and their allies met Wednesday and expressed confidence in prospects for a global economic recovery and attendant rise in crude oil demand.

"As mass vaccination programs continue and the macro-economic situation improves, there is a growing optimism over global oil demand," Russian Deputy Prime Minister Alexander Novak was quoted by the Ria agency as saying.

He spoke during a videoconference meeting of OPEC+'s monthly Joint Ministerial Monitoring Committee (JMMC).

A statement published after the meeting said all participants were "optimistic" for a "year of recovery in 2021".

"The gradual rollout of vaccines around the world is a positive factor for the rest of the year, boosting the global economy and oil demand," the statement said.

That optimism has been reflected in oil markets since early November, with benchmark crude contracts now trading at around $60 (50 euros) per barrel -- levels last seen in early 2020.

Prices have also been supported by OPEC+ countries agreeing to production cuts in the wake of the coronavirus-induced plunge in demand last spring.

Those cuts have continued into 2021, with a reduction of 7.2 million barrels per day in January, 7.125 million bpd planned for February and 7.05 million bpd in March.

In addition OPEC mainstay Saudi Arabia has volunteered to a cut a million extra barrels per day from its production in February and March.

"The OPEC+ production strategy is working," said analyst Jeffrey Halley of Oanda.

Few analysts had expected a dramatic JMMC meeting Wednesday, with more heated discussion on the way forward possible at the next full OPEC+ ministerial meeting on March 4.

© Agence France-Presse

Watch more News on iWantTFC