OPEC+ to discuss weakening oil demand outlook

An aerial view of Al Dora oil refinery in Baghdad, Iraq, July 11, 2020. (Reuters)

SULAIMANI (ESTA) — Oil producer group OPEC+ will meet on Monday to discuss the weakening demand outlook in the face of rising coronavirus infections as well as increased output from Libya but is unlikely to recommend immediate action, Reuters cited OPEC+ sources as saying.

An OPEC+ joint ministerial monitoring committee, comprising top producers Saudi Arabia and Russia, is scheduled to meet from 1330 GMT, according to Reuters.

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, collectively known as OPEC+, have been reducing output since January 2017 in an effort to balance the market, support prices and reduce inventories.

They are currently curbing production by 7.7 million barrels per day (bpd), down from 9.7 million bpd, and are due to taper cuts by 2 million bpd in January.

Several OPEC watchers, including analysts from U.S. investment bank J.P. Morgan, have suggested that a bearish demand outlook could prompt OPEC+ to delay any easing of the reductions. The United Arab Emirates and Russia, however, have said that cuts would be eased as planned.

The group will meet again on Nov. 30.

OPEC+ experts last week discussed risks of a persisting supply overhang in 2021 in the event of a prolonged and severe second wave of the COVID-19 pandemic.

“Demand itself is still looking anaemic,” OPEC Secretary General Mohammad Barkindo said last week.

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