Most OPEC+ countries would like to postpone a planned increase in oil output from February due to weakening fuel demand amid new global lockdowns to stop the spread of the coronavirus, three OPEC+ sources said on Monday.
OPEC+, a group combining OPEC and allies such as Russia, meets later on Monday after a meeting of OPEC+ experts on Sunday, when OPEC Secretary General Mohammad Barkindo said he saw downside risks for oil markets in the first half of 2021.
“Amid the hopeful signs, the outlook for the first half of 2021 is very mixed and there are still many downside risks to juggle,” said Barkindo.
“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,” Barkindo said.
In December, OPEC+ decided to increase production by 0.5 million bpd from January as part of a 2 million bpd gradual rise this year, but many members have questioned the need for a further boost due to spreading coronavirus infections.
Brent oil prices rose above $53 per barrel on Monday, touching multi-month highs on expectations that OPEC+ will hold output steady in February.
OPEC’s leader Saudi Arabia has suggested a more cautious approach during previous meetings, while OPEC member the United Arab Emirates and non-OPEC member Russia have said they prefer a speedier increase.
OPEC+ was forced to cut production by a record amount in 2020 as global lockdown measures hammered fuel demand.
OPEC+ first cut output by 9.7 million bpd, then eased cuts to 7.7 million and ultimately to 7.2 million from January.
Reporting by Alex Lawler in London, Vladimir Soldatkin and Olesya Astakhova in Moscow; Writing by Dmitry Zhdannikov; Editing by Jan Harvey and Mark Potter