OPEC predicts oil market rebound in 2021 Q2

The Organisation of Petroleum Exporting Countries (OPEC) predicts a strong rebound in the global oil market in 2021 second quarter despite the growing ravaging impact of the COVID-19 pandemic.

It said the fall in oil demand in 2020 is expected to rise to about 95.9 million barrels per day, while non-OECD allies expected to account for about 3.3 million barrels per day output.

The OPEC Secretary-General, Mohammad Barkindo, stated this in his remarks at the opening of the 47th Meeting of the Joint Technical Committee (JTC) held via videoconference.

He said with crude oil prices up by about $7 per barrel, or 17 per cent since the last Ministerial meeting, the outlook for the first half of 2021 remains mixed, with many downside risks to contend with.

“We are only beginning to emerge from a year of deep investment cuts, huge job losses and the worst crude oil demand destruction on record.

“Curbs on social and economic activity remain in place in a number of countries, and there is concern about the emergence of a pernicious new strain of the virus,” he added.

The meeting was held ahead of Monday’s opening of the 25th monthly meeting of the Joint Ministerial Monitoring Committee (JMMC) and the 13th OPEC and non-OPEC Ministerial Meeting to evaluate the market and the Declaration of Cooperation (DoC) with members and their allies.

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Both committees were created under the umbrella of the DoC signed at the First OPEC and non-OPEC Ministerial Meeting on December 10, 2016, in Vienna, Austria.

The JTC is the JMMC’s technical think-tank.

The mandates of the JMMC and JTC include reviewing the conditions and developments of the global oil market, as well as monitoring the conformity levels to the voluntary production adjustments adopted by OPEC’s 13 Member Countries and ten key non-OPEC oil-producing countries.

The DoC participating countries began last year to introduce adjustments of about 1.7 million barrels per day output, with additional voluntary contributions raising the volume to about 2.1 million barrels per day.

The adjustments were agreed at the 7th OPEC and non-OPEC Ministerial Meeting in December 2019, as a response to support the continued market stability in 2020.

Mr Barkindo who said a review of the market projections by the JTC has revealed tremendous progress towards set targets commended the OPEC Secretariat for continuing to meet its targets and deliverables.

Following an enormous challenge posed by growing instability in the oil market, occasioned by the COVID-19 pandemic, the OPEC+, made up of members of OPEC and their allies in the non-OPEC, was forced to cut production by a record 10million in 2020.

Apart from its initial cut output by 9.7 million barrels per day between May and June 2020, the group followed up with another cut to 7.7 million between July and December 2020, with the ultimate cut expect to take the output to 7.2 million between January 2021 and April 2022.

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OPEC predicts oil market rebound in 2021 Q2