EXCLUSIVE-OPEC + fears that the second wave of coronavirus will cause an excess of supply in 2021

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EXCLUSIVE-OPEC + fears that the second wave of coronavirus will cause an excess of supply in 2021




The OPEC logo in this illustration, April 14, 2020


© Reuters / DADO RUVIC
The OPEC logo in this illustration, April 14, 2020


Por Vladimir Soldatkin

MOSCOW, Oct 16 (Reuters) – OPEC and its allies fear that a second wave of the COVID-19 pandemic and a jump in Libya’s production could push the oil market into a surplus next year, according to a confidential document. seen by Reuters, a bleaker picture than a month ago.

A panel of OPEC + producer officials, called the Joint Technical Committee, considered this the worst-case scenario during a monthly virtual meeting on Thursday. As of September, the panel had not seen a surplus in any of its forecasts.

The surplus could threaten plans by OPEC, Russia and their allies, known as OPEC +, to gradually lift the record production cuts made this year and add 2 million barrels a day of oil to the market in 2021.

The Organization of the Petroleum Exporting Countries (OPEC) has so far not indicated any plans to rule out such increased supply.

“The first signs of economic recovery in some parts of the world are overshadowed by fragile conditions and growing skepticism about the pace of recovery,” says the document used at the panel’s monthly meeting in October.

“In particular, the resurgence of COVID-19 cases around the world and the prospects for partial lockdowns in the coming winter months could compound the risks to the recovery of the economy and oil demand,” it adds.

The document presents scenarios that include a base case in which it still showed a deficit in 2021 of 1.9 million barrels per day (bpd) on average, less than the 2.7 million bpd forecast in the previous month’s base case. .

But in the worst case, the document says the market could fall into a surplus of 200,000 bpd in 2021.

(Report by Vladimir Soldatkin; Edited in Spanish by Javier López de Lérida)

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