The Organisation of Petroleum Exporting Countries (OPEC) and its allies on the Joint Technical Committee (JTC) are keeping the cartel's forecast for growth in global oil demand this year, amid worries of surging COVID-19 cases in India, it was learnt yesterday.
In its most recent monthly oil market report, the cartel had raised its forecast for global oil demand growth by 70,000 barrels per day (bpd) to 5.95 million bpd, which it is leaving unchanged for now.
The JTC meeting also expressed concern about rising COVID-19 cases in India, Japan and Brazil, as prices fell yesterday on fears that rising infections, especially in India, will dent fuel demand in the world's third biggest oil importer.
The JTC usually reviews market fundamentals and monitors compliance with the group's oil production cuts and reported compliance levels, keeping the figures for March at 113 per cent, unchanged from levels in February, sources within the meeting said.
But efforts by OPEC and its allies to calm the market by maintaining production curbs and the staggering spread of COVID-19 in India will be major factors influencing the price of oil this week and perhaps, the decision of the organisation two days from now.
OPEC+ opted in early April to put another 350,000 barrels per day on the market through June, and economists at the cartel raised their forecast for oil demand in this month's report.
In his opening remarks at the commencement of the 51st virtual meeting which took place via videoconference, OPEC Secretary-General, Dr. Sanusi Barkindo, reiterated that the organisation must be cautious and vigilant given the current fragile oil market situation.
He stated that OPEC had received good news regarding the inventory glut that amassed during the pandemic, with commercial oil inventories now standing just 77 million barrels above their 2015-2019 average as of March, down from a peak of 249 million in July, in the Organisation for Economic Cooperation and Development (OECD) countries.
"This is a remarkable turnaround from that fateful Monday last April, when the world was fretting about running out of storage," he stated.
He added that what has been apparent about the group over the last year is how responsive it has been to the fast-changing environment.
But he said despite the positive developments, OPEC was aware that it was far from putting the pandemic behind.
"In just three days, India recorded over a million new infections. For four successive days, the country saw record numbers of daily numbers of COVID-19 infections, exceeding 300,000 new cases per day," he added.
According to him, while the world can take comfort from the fact that over one billion vaccinations have been administered worldwide, reaching herd immunity will not be without setbacks.
The JTC meeting is in preparation for the 29th meeting of the Joint Ministerial Monitoring Committee (JMMC) and the 16th OPEC and non-OPEC Ministerial Meeting (ONOMM) scheduled for tomorrow.
Barkindo thanked members of the JTC for their ongoing efforts in examining the developments of the global oil market and providing analysis to support decision-making, noting that the committee has contributed greatly to the success of the historic Declaration of Cooperation (DoC).
In highlighting the improving oil market outlook, Barkindo added: "There are positive signals regarding the global economy and prospects for our industry." However, he added that there are many factors that require ongoing monitoring and vigilance.