Three OPEC + sources told Reuters that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC +, are considering extending oil production cuts from March to April instead of increasing production due to the fragility of crude markets due to continuing concerns about Coronavirus pandemic.
OPEC + ministers will hold a plenary meeting tomorrow, Thursday.
The market broadly expects OPEC + production cuts, the deepest on record, to ease by 0.5 million barrels per day from April.
Saudi Arabia, the largest producer in OPEC, is also expected to end a voluntary production cut of 1 million barrels per day.
But on Wednesday, three OPEC + sources said that some key OPEC members were proposing to keep OPEC + production unchanged in April. It was not immediately clear whether Saudi Arabia would end voluntary cuts in March or extend them further.
Oil prices jumped about a dollar a barrel thanks to the news, trading near 64 dollars a barrel.
Yesterday, Tuesday, a document prepared by OPEC + experts and seen by Reuters called for “cautious optimism”, citing “the uncertainty inherent in the present markets and sentiment at the macro level, especially the risks from Corona spikes that are still on the rise.”
She mentioned that the recent increase in the price of oil may be due to more financial players than an improvement in the fundamentals of the present oil markets.
OPEC expects global demand for oil to grow in 2021 by 5.8 million barrels per day to about 96 million barrels, compared with about 100 million barrels per day in 2019, before demand declines in 2020 due to the pandemic.