Next Tuesday the Organization of the Petroleum Exporting Countries will evaluate its decision to limit oil production.
The Organization of the Petroleum Exporting Countries (OPEC) gathers its members and ten allies on Tuesday in a meeting in which it will probably decide to increase production again to meet the increase in demand.
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At the beginning of May, the 23, which leave millions of barrels underground so as not to flood a market weakened by the new coronavirus pandemic, began to reopen the black gold taps more before the improvement of the health crisis. A gradual strategy planned until July.
This policy and its possible extension from August will be evaluated on Tuesday.
OPEC +, an acronym for this producer alliance formed in 2016, “will stick to the prudent calendar agreed in April,” estimates Helima Croft, an analyst at RBC. Russia, leader of the allies, “will probably try to accelerate the pace” as it has been doing since the beginning of the year, he adds.
But he will face Saudi Arabia, a heavyweight in the cautionary cartel that will support his position on the resurgence of COVID-19 infections in Asia.
Vaccines, travel and precovid prices
Indeed, the market was hit in May by a wave in India, the third country that consumes the most oil, behind the United States and China.
Despite the re-imposition of travel restrictions in several Asian countries, which curbed oil consumption, “demand should continue to increase with the intensification of summer travel in Europe and the United States,” says Melinda Earsdon of Oanda. , “Thanks to the rapid deployment of vaccines” in these regions of the world.
OPEC is also optimistic about the recovery in demand: the cartel maintained its forecasts at the beginning of the month and expects a rebound of six million barrels per day this year compared to 2020, to the 96.5 million consumed daily in the planet.
This (along with the voluntary cut in supply by the cartel and its allies) causes a “clearly deficit global crude balance”, according to JBC analysts’ calculations, “of around three million barrels per day in July- August”. And it affects prices, which have returned to pre-pandemic levels: a European barrel of Brent touched US $ 70 on Friday and the WTI was worth around US $ 66.
The Iranian unknown
OPEC is not only attentive to the demand for black gold, but closely follows the supply of its competitors, such as the United States, the world’s largest producer, and its own members, a subject of contention at ministerial summits.
Follow the news of El Espectador on Google NewsLibya has gradually returned to producing one million barrels a day by the end of 2020 and Iranian production will return to the market in the more or less near future, “a key point of discussion,” says Croft.
The Islamic Republic has entered into indirect negotiations with the United States in Vienna, through the mediation of Europeans, to revive an agreement on its nuclear program.
If the negotiations are successful, the lifting of some economic sanctions, such as the oil embargo in force since 2018, would clear the way for an increase in production of almost 1.5 million barrels a day compared to the current level of Tehran. with the one from three years ago.
