Kuwait’s oil minister Mohammed Abdul Latif al-Fares says the oil market “will be able to absorb the gradual production increases” planned by Opec and its non-Opec partners over the next couple of months as global oil demand gains support from Covid-19 vaccine programmes.
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“There are indications of a return to normalcy in many countries of the world with the acceleration of vaccination programmes against Covid-19 globally,” al-Fares said, adding that he expects a recovery in oil demand in the second half of this year “as market fundamentals improve”. His outlook on demand chimes with the Opec secretariat’s view.
Al-Fares was speaking as Opec+ ministers prepare to meet to decide whether to change course on output policy.
In line with decisions taken in April, the Opec+ group’s collective output ceiling rose by 350,000 b/d in May and is due to go up by another 350,000 b/d this month and a further 441,000 b/ in July. These increases coincide with Saudi Arabia’s own plan to gradually unwind its additional 1mn b/d output cut in the May-July period.
India’s high Covid case numbers and the potential imminent return of Iranian barrels to the market have raised the possibility that the group might rethink its plan.
But several delegates have told Argus that they expect Opec+ to stick with its current output policy for the time being, although one said any further quota increases beyond July should be postponed until the Iranian situation becomes clearer.
Al-Fares’ comments suggest that Kuwait is in favour of keeping the group’s production policy unchanged.
The Opec+ alliance’s Joint Ministerial Monitoring Committee (JMMC) is scheduled to meet at 13:00 Vienna time (11:00 GMT), and the ministerial meeting will follow shortly after at 14:30 Vienna time.
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