Global oil demand is set to recover to near pre-covid-19 levels by the end of this year, Saudi Arabia’s Energy Minister Prince Abdulaziz said ahead of the OPEC + Joint Ministerial Monitoring Committee meeting today, according to The National.
Specifically, Prince Abdulaziz expects oil demand to recover to 97% of pre-Covid levels.
That 97% is also the compliance rate that OPEC + achieved in July, after promising to reduce 9.7 million barrels per day from the group’s oil production levels.
Saudi Arabia has relied heavily on members of the group who have not followed the cuts to the same obligatory – and painful – level as Saudi Arabia has. The group’s laggards include Iraq and Nigeria, which are losing their quotas by large margins.
In response, Nigeria and Iraq – along with the other laggards Kazakhstan and Angola – have agreed to continue with enough production to make up for the last few months for sick compliance.
“We should try to put this temporary compensation regime behind us, by erasing all the overproduction of the past at the end of September,” Prince Abdulaziz told the meeting.
But that would indeed be an ambitious undertaking for Nigeria and Iraq, which have so far had problems with all OPEC agreements, and which have not shared a specific plan to bring their oil production into line with the group’s agreement. .
Regardless of the poor performance of the laggards, Prince Abdulaziz noted that the oil market has shown signs of improvement with a trend in global inventories, a decline in urgent storage, and a recovery in demand for gasoline and diesel.
Oil prices were down slightly on Wednesday, even after the EIA reported drawings for crude oil and petrol for the week, and even after Prince Abdulaziz’s positive talks.
By Julianne Geiger for Oilprice.com
More top reads from Oilprice.com:
Back to the home page
.
