Analysts admit an increase in oil production quotas in March

The discipline of the participants in the OPEC + deal and the expectation of the end of the recession in the world economy against the background of a decrease in morbidity will contribute to the growth of oil prices, experts interviewed by Izvestia say. In their opinion, if the current dynamics of the market is maintained, in March the cartel may increase quotas for oil production. At the same time, even if OPEC + decides to continue to contain it, this will still lead to an increase in prices for black gold.

– Oil prices react positively to any news about OPEC +. This is due to the fact that over the past time the alliance has proven its effectiveness as a much more effective regulator of the oil market than the classical OPEC, – explained Alexander Frolov, Deputy Director General of the Institute of National Energy.

The OPEC + monitoring committee meeting on February 3 ended with no recommendations for production, despite optimism in the outlook for the market among the oil cartel countries. OPEC + allowed a faster recovery in demand for black gold in the second half of 2021 due to active vaccination against coronavirus.

The committee also noted a significant additional decrease in oil production by Saudi Arabia from February 1, 2021 (the Saudis unilaterally cut production by 1 million barrels per day in February and March) and gave a positive assessment of compliance with the deal by other countries, the organization says.

Against the backdrop of such optimism, oil prices continued to rise. On February 3, at 19:45 Moscow time, the price for the April futures for a barrel of Brent reached $ 58.83, by 22:00 it dropped to $ 58.52.

OPEC + countries signed an agreement to cut oil production in mid-April 2020. Since May 1, the cartel members have reduced it by 9.7 million barrels per day for three months compared to October 2018. Production has increased slightly since August. The reduction has already amounted to 7.7 million barrels per day by the end of the year. At the meeting on January 5, the participants decided that in February and March 2021, only Russia and Kazakhstan will be able to increase the production of black gold – by 65 thousand and 10 thousand barrels per day, respectively.

Read more in the exclusive material from Izvestia:

No comment: why the OPEC + committee did not give recommendations to the participants in the transaction

source https://pledgetimes.com/analysts-admit-an-increase-in-oil-production-quotas-in-march/