PREVIEW - OPEC To Begin Talks On Oil Cuts For August, Compliance With Past Quotas
Muhammad Irfan 1 month ago Thu 01st July 2021 | 02:10 AM
MOSCOW (UrduPoint News / Sputnik - 01st July, 2021) The meeting of the OPEC Conference and the OPEC and non-OPEC Ministerial Meeting are set to convene on Thursday in online format to determine the volume of oil cuts in August and discuss compliance levels with oil production quotas in May.
The 181st meeting of the OPEC Conference will begin at 11:00 GMT, and the 18th OPEC and non-OPEC Ministerial Meeting will convene later the same day at 14:00 GMT by videoconference.
For the month of May, compliance with production adjustments in the Organization of the Petroleum Exporting Countries (OPEC) and its oil producing allies, known as OPEC+, was estimated at 114% by the International Energy Agency (IEA). In April, the levels also reached 114%, the alliance of oil producers said, which shows a trend of high conformity with quotas by the participating countries.
As for negotiations on output cuts for August, many expect there to be a gradual increase in quotas. According to the IEA, OPEC+ will need to "open the taps" to keep the world oil markets adequately supplied amid growing demand. If the dynamics continue, the global oil demand is expected to rebound by 5.
4 million barrels a day (mbd) in 2021 and will reach 100.6 mbd by end of 2022, overtaking pre-COVID-19 levels, the IEA said.
The world oil supply is also expected to grow at a faster rate in 2022, with the US driving gains of 1.6 mbd from non-OPEC+ providers, the IEA noted. That would leave room for OPEC+ countries to boost crude oil production by 1.4 mbd above their July 2021-March 2022 target, the agency added.
Under the circumstance, Kazakhstan is most likely going to push for the gradual increase in crude oil production under the OPEC+ deal, following Kazakh Energy Minister Nurlan Nogaev's statement. He stressed that with worldwide vaccination allowing enterprises to reopen, economic activity has begun to grow, driving demand.
In May-July 2020, OPEC+ implemented the historic 9.7 mbd oil production cut due to the unprecedented drop in oil demand caused by pandemic shutdowns. As the situation stabilized, the quotas were adjusted, decreasing to 6.55 mbd in May 2021, further 6.2 mbd in June and 5.76 mbd in July.