Worried About Declining Oil Demand, OPEC Pledges Action

EghtesadOnline: OPEC and allied producers have pledged action to support the oil market as concerns mounted that a second wave of the Covid-19 pandemic will hobble demand and an earlier plan to raise output from next year would further depress prices.

News ID: ۷۵۱۳۱۶

21 October 2020

OPEC has said no-one should doubt the group’s commitment to providing support, while three sources from producing countries said a planned output increase from January could be reversed if necessary, Reuters reported.

Already Russian President Vladimir Putin and Saudi crown prince, Mohammed bin Salman held two phone calls last week. Kremlin Dmitry Peskov spokesman said regular contact was necessary as the markets were volatile.

OPEC and its allies, including Russia, collectively known as OPEC+, have curbed output since January 2017 to try to support prices and reduce inventories.

“This group has shown, especially in this year that it has the flexibility to adapt to changing circumstances when required. We will not dodge our responsibilities in this regard,” Saudi Energy Minister Abdulaziz bin Salman said.

“Nobody in the market should be in any doubt as to our commitment and our intent.”

For now, OPEC+ is reducing production by 7.7 million barrels per day (bpd), down from cuts totaling 9.7 million bpd enforced from May 1 to Aug. 1. OPEC+ is due to reduce the cuts by a further 2 million bpd in January.