Last week’s surprise decision from OPEC+ to ease the production cuts by a cumulative 2 million barrels per day (bpd) by July relies on expectations of robust oil demand recovery in the second quarter. Yet, recent demand concerns suggest the alliance’s supply management policies could once again be more in the realm of guestimates.
The easing of the collective cuts by over 1 million bpd over the next three months, plus Saudi Arabia reversing gradually its extra 1 million bpd cut signal that OPEC+ expects demand to rebound strongly and justify supply increases, Reuters columnist Clyde Russell writes.
However, the unpredictability of the COVID resurgence in major economies lagging behind in vaccination programs could spoil the OPEC+ forecasts and supply management policies once again.
Last week, OPEC+ decided to gradually increase collective oil production by 350,000 bpd in each of May and June and by more than 400,000 bpd in … Read more