The Organisation of Petroleum Exporting Countries (OPEC) remained upbeat yesterday, saying the the oil market's outlook continues to be generally positive as the headwinds of uncertainty from last year continue to abate.
Secretary General of the group, Dr Sanusi Barkindo, speaking during the opening of the 49th Meeting of the Joint Technical Committee (JTC), held via videoconference, stated that positive global economic developments and resilient demand in Asia were encouraging global oil market stability.
He highlighted that the meeting would set the stage for a busy week of negotiations, the outcomes of which he said will have a lasting influence on the crude oil markets in the months to come.
The event was the first stage in the preparation for the third Joint Ministerial Monitoring Committee (JMMC) and second OPEC and non-OPEC Ministerial Meeting of the year.
Barkindo stated that both the global economic outlook and oil market prospects show signs of continued improvement, stressing that the headwinds of uncertainty that shocked and disrupted the market last year had continued to subside.
"The economic recovery is gaining momentum. This is reflected in our latest global growth estimate of 4.8 per cent for 2021, up from the 4.4 per cent projection we shared at our last meeting.
"This is major turnaround from the grim conditions of 2020, with our most recent estimates showing the global economy plummeting by 3.9 per cent," he noted.
He added that the Joe Biden administration's massive fiscal stimulus package, which passed its first legislative hurdle by winning US House approval last Saturday, continues to kindle hope for a sustained rebound.
According to Barkindo, against the backdrop of encouraging developments, oil demand remains on course to grow by 5.8 mb/d to just around 96 mb/d, noting that the encouraging global economic developments and resilient demand in Asia are upside factors, especially beyond this quarter.
But while calling for caution, the OPEC helmsman, noted that regarding inventories, global short-term floating storage has fallen every month since October and stood at 142 mb in January this year, significantly less than the 250 mb reached in mid 2020.
He expressed delight that the market was tightening and the rebalancing process was gaining speed, saying that the days of Gross Domestic Product (GDP) and oil demand figures being in the red because of the pandemic-induced shock appear to be behind the world.
"Yet cautious optimism remains the phrase of the day. We must be mindful that COVID-19 infections continue to rise and malicious mutations are spreading across countries and regions," he said.
He opined that the full potential of world economies cannot be unleashed so long as the pandemic continues to be around, but added that there's abundant evidence to show that the historic voluntary production adjustments agreed last year by the Declaration of Cooperation (DoC) participating countries were the right course of action at the right time.