Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

OPEC+ Sees Strong Oil Recovery Clouded by India Virus Surge

CommoditiesApr 27, 2021 03:54
Saved. See Saved Items.
This article has already been saved in your Saved Items
2/2 © Bloomberg. An ambulance departs after being turned away from Lok Nayayak Jaiprakash Hospital in New Delhi, India, on Sunday, April 25, 2021. Noting that at least six high courts are hearing disputes about Covid-19 management including oxygen shortages, the Supreme Court on Thursday asked India's federal government to come up with a national plan for the distribution of essential supplies and services. Photographer: T. Narayan/Bloomberg 2/2

(Bloomberg) -- OPEC and its allies projected a strong recovery in global oil demand this year, but the outlook was clouded by a raging virus outbreak in India just days before the group’s next meeting.

A committee of technical experts from the group forecast that world oil consumption will rebound by 6 million barrels a day this year, according to delegates who attended the panel on Monday. Most of the fuel inventory glut accumulated during the pandemic will have dissipated by the end of this quarter, they estimated.

Still, the Joint Technical Committee’s report cautioned that resurgent coronavirus cases in India, Brazil and Japan “may adversely impact global economic growth,” the delegates said, asking not to be named because the meeting was private. The worsening situation in these countries could “derail the oil demand recovery.”

OPEC+ moved the meeting of its main monitoring committee to Tuesday, one day earlier than planned, according to a delegate.

The Joint Ministerial Monitoring Committee will hold a teleconference -- rather than the usual video conference -- at 2 p.m. Vienna time, a delegate said. The JMMC considers policy options on behalf of ministers, who are due to hold a full meeting on Wednesday.

They will consider the projections as they decide whether it’s safe to proceed with their plans to revive halted oil production. The alliance aims to restore about 2 million barrels a day over the next three months, roughly a quarter of the output currently off-line.

Assessing India

“There are positive signals regarding the global economy and prospects for our industry,” OPEC Secretary-General Mohammad Barkindo told officials at the start of the online meeting, according to a statement posted on the group’s website.

When the pandemic crushed fuel demand last year, the 23-nation alliance led by Saudi Arabia and Russia rescued the global oil industry from an unprecedented price rout by slashing production. The Organization of Petroleum Exporting Countries and its partners are now in the process of carefully restarting those supplies as economic activity resumes.

“We still think it is more likely that the producer group will continue with the gradual output increases,” Helima Croft, chief commodities strategist at RBC Capital Markets LLC, said in a report. Still, the bank doesn’t “rule out that they could take a temporary pause on planned production increases to assess the situation” in India.

The JTC’s forecast for demand growth in 2021 is more optimistic than the one it published a month ago, of 5.6 million barrels a day, though roughly in line with a report published by OPEC’s secretariat a couple of weeks ago.

The committee expects that global fuel stockpiles will decline at an average rate of 1.2 million barrels a day this year, compared with an estimate of 800,000 a day last month.

As a result, the surplus in oil inventories -- relative to their 2015 to 2019 average -- will be whittled down to just 8 million barrels by the end of this quarter, according to the JTC’s data. Depleting the world’s bloated stockpiles is one of OPEC’s main objectives.

©2021 Bloomberg L.P.

OPEC+ Sees Strong Oil Recovery Clouded by India Virus Surge

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email