LONDON/DUBAI/MOSCOW -OPEC+ oil producers were split on Monday over increasing output from February as some feared a hit from new coronavirus lockdowns while Russian Federation and Kazakhstan said demand recovery justified higher production, five OPEC+ sources said. On 20 April 20, West Texas Intermediate (WTI) crude (CL=F) collapsed to minus $40.32 per barrel.
Also on Wednesday, sources at the Organization of the Petroleum Exporting Countries (OPEC) told media that compliance with supply cuts in November was 101 percent and suggested that the cuts won't fluctuate any time soon: "Is the oil demand forecast for the first quarter of 2021 better than that forecast in early December?"
The two contracts of reference, North Sea Brent Crude and West Texas Intermediate (WTI) crude both ended the week around the $50 per barrel level, far lower than the prices seen at the start of 2020 but well up on the lows seen a year ago.
Opec+ was forced to cut production by a record amount in 2020 as global lockdown measures against the virus hammered demand for fuels.
With Brent holding above $50 per barrel, OPEC+ took the opportunity to raise output by 500,000 bpd in January, putting its current cuts at 7.2 million bpd. The meeting will be held every month in 2021 to assess market conditions and needs and decide an adjustable monthly production accordingly.
With benchmark Brent oil futures holding above $50 per barrel, OPEC+ took the opportunity this month to raise output by 500,000 barrels per day (bpd) as it looks to eventually undue cuts that now stand at 7.2 million bpd.
The punches received by the oil market in 2020 and the ensuing drop in valuations of energy stocks are well documented.
Despite expectations about oil demand recovery in 2021, it is anticipated to remain lower than it was before the pandemic.
He said that 2020 was not easy for any of the member states because Covid-19 had been a blow to their economies.
Minister of Oil and Minister of Electricity and Water Dr. Mohammad Al-Fares said, prior to his participation in the OPEC+ meeting, that Kuwait supports decisions that would maintain the oil market stability, especially considering negative consequences due to COVID-19, according to a press statement issued by the Oil Ministry.
Market anticipates that in February the production levels of crude would remain at the same level as a year ago and with elevated demand, prices could remain firm.
It remains to be seen whether this trend will be sustainable but it is good news for the market.