The OPEC group of oil-producing countries and its allies look set to boost production further when they meet Tuesday, as pandemic-hit demand for crude recovers. The OPEC+ alliance, consisting of 23 countries, implemented sharp output cuts to support prices after the coronavirus pandemic crushed the global economy last year.
But since early May the cartel has started implementing more generous production increases as oil prices have recovered and the health situation improves in developed economies.
Currently the production roadmap for OPEC+ members consists of a series of increases between May and July adding up to some 1.2 million barrels per day (bpd). On the agenda at Tuesday’s meeting, expected to start at 1100 GMT, will be whether this can be extended into August.
“OPEC+ currently finds itself in a very favourable situation,” said Eugen Weinberg of Commerzbank.
Among OPEC’s allies, Russia has been pushing for faster rises in output but traditional OPEC kingpin Saudi Arabia supports a much more cautious note, pointing to the surge of coronavirus infections in parts of Asia.