OPEC SEC: We must be very careful with the increase in production – Signs of surplus in the market

OPEC “sees” signs of oil surplus in the market from next month, with the general secretary of the cartel advising its members and their allies to be “very, very careful” regarding the review of production policy in the regular monthly meetings their.

It is recalled that the Organization of the Petroleum Exporting Countries and its allies, known as OPEC +, are gradually expanding oil production after the record cuts decided in 2020 to support crude prices, increasing their production by 400,000 barrels per day each month.

Although the United States is pushing OPEC to accelerate its output growth to meet rising crude prices, OPEC + has so far resisted, sticking to its plan to carefully increase output.

The warning comes as external pressure continues to rise on production, raising questions about OPEC + ‘s stance at its next policy meeting on December 2.

“Already, there will be a surplus from December,” said OPEC Secretary-General Mohamed Barcido on the sidelines of an energy conference when asked if he was sure there would be a surplus in oil supply next year.

“These are indications that we must be very, very careful,” he told reporters.

At the same time, he added that “forecasts, not only of OPEC, but of the International Energy Organization (IEA) and other sources, show that in all quarters of next year there will be oversupply in the market based on the measurement of OECD stocks.”

“This is another proof that we have to be very careful and prudent in the decisions we make every month,” he said, adding that the cartel has a legitimate interest in ensuring that the global economic recovery continues.

“We believe that we are on a recovery trajectory and we at OPEC will continue to do what is necessary so that this recovery is not shaken,” he concluded.

Barcido declined to say whether he believed OPEC + would stick to its current production policy when it meets on December 2nd.

However, on Monday, the UAE Minister of Energy hinted that OPEC + is likely to maintain its policy despite the market surplus expected in the first quarter.

This is because although global oil demand is recovering from the pandemic caused by the pandemic in 2020, OPEC estimates that demand growth next year is expected to slow and at the same time supply from competitors such as shale oil companies will increase. of the USA.

West Texas Intermediate crude for December delivery was up 0.6 percent at $ 81.38 a barrel on the New York Mercantile Exchange and Brent crude for January delivery was up 0.9 percent at $ 82.80 a barrel.