OPEC urges Nigeria, others to stick to production cut

OPEC urges Nigeria, others to stick to production cut

Mohammed Sanusi Barkindo, the Secretary-General of the Organisation of the Petroleum Exporting Countries has said OPEC and its allies need to remain disciplined with their production to ensure full oil price recovery as the global economy continues to rebound from the COVID-19 pandemic.

“We must emphasise in strong terms: cautious optimism, cautious optimism, cautious optimism,” Barkindo said at a delegate-level OPEC+ technical committee meeting on Tuesday, two days ahead of when ministers will convene online to decide on production levels for April and perhaps beyond.

According to S&P Global Platts, several members are expected to push for a loosening of quotas.

Under the current agreement, OPEC and nine allies are cutting a collective 7.2 million barrels per day of production, which can be eased by up to 500,000 bpd each month.

Barkindo said OPEC’s analysts projected that global oil demand would grow by 5.8 million bpd in 2021 to reach 96 million bpd, compared to a pre-pandemic market of around 100 million bpd.

“The encouraging global economic developments and resilient demand in Asia are upside factors,” he said.

He added that global COVID-19 infections rose in the last week of February, indicating that the pandemic still posed downside risks to the economy.

Barkindo said the distribution of vaccines, which favoured the world’s richer nations, would also lead to an uneven recovery.

He said, “Progress on COVID-19 vaccinations continues in many countries, but the current pace shows that many developing countries risk being left behind.

“We hold out hope that the multilateral and multiparty efforts will support inclusive and speedy worldwide access to inoculations.”

The OPEC+ Joint Technical Committee, which met on Tuesday, is tasked with reviewing market conditions and assessing member quota compliance.

It advises the Joint Ministerial Monitoring Committee, which will meet on March 3.

The JMMC, in turn, advises the full OPEC+ conference, which will meet on March 4.