The OPEC lowered its estimate of the amount of crude it will need to produce next year, days before ministers assess the impact of supply restrictions on world markets.
The crude producing group and its allies will hold a follow-up meeting this Monday to consider whether unprecedented production cuts that they have carried out this year are managing to maintain the balance of the world market.
LThe coalition, led by Saudi Arabia and Russia, is to relax restrictions early next year and will restore some supplies, but delegates are increasingly concerned about whether markets can absorb additional barrels.
In contrast to last month’s report, lThe organization cut estimates for the supply it will have to provide this quarter by 900,000 barrels a day, to 27.46 million a day.
In September it made an even bigger cut. OPEC is producing well below this level to meet the supply pact.
OPEC anticipates an improvement in its fortunes once the global market emerges from the pandemic.
In a long-term perspective published earlier this month, the group projected to gain market share by the time oil demand recovers to pre-crisis levels in 2022.
While the american piercers will also recover, these boost production at a slower pace than anticipated previously.
It’s a more optimistic forecast than the one released Tuesday by the International Energy Agency, which advises most major economies. The Paris-based IEA said world oil demand will not return to previous levels until 2023 and will stabilize by the end of the decade.