By Rania El Gamal and Ahmad Ghaddar
LONDON, Oct 15 (Reuters) – An OPEC + group technical committee on Thursday discussed increased oil supplies to the market as production resumes in Libya, amid a weaker demand outlook due to a second wave of coronavirus infections, said two sources in the group.
The Joint Technical Committee (JTC), which includes representatives from key OPEC + producers such as Saudi Arabia and Russia, met to review compliance with global crude production cuts and review the oil market.
The group made 102% of its production cuts in September, two OPEC + sources told Reuters.
On Thursday, the secretary general of the Organization of the Petroleum Exporting Countries (OPEC), Mohammad Barkindo, told a conference that demand was recovering at a slower rate than expected.
“We have to be realistic that the recovery is not accelerating at the rate we expected earlier in the year,” he said. “The lawsuit itself still looks anemic.”
OPEC + delegates discussed the slow recovery in demand in the fourth quarter of this year, when it was seasonally expected to increase, one of the sources said.
Libya’s resumption of oil pumping and the lack of a vaccine for COVID-19, as several countries face an increase in cases and new restrictions to try to contain the pandemic, could mean a downward revision of the demand for crude, creating a bearish outlook for the market in the coming months, he added.
The panel also discussed OPEC data showing excess stocks throughout 2021, with OECD inventories 301 million barrels above the five-year average in the past quarter, compared to 245 million. , 181 million and 173 million barrels in the first three quarters, the source said.
OPEC +, which includes producers from OPEC and other countries like Russia, has been reducing its pumping since January 2017 in an attempt to balance the market, support prices and reduce inventories.
They are currently reducing pumping by 7.7 million barrels per day (bpd), down from 9.7 million bpd, and should cut their production cuts by 2 million bpd in January.
But the bearish outlook for demand on Thursday and increased supply from Libya mean that OPEC + could carry over existing cuts to next year and delay the relaxation of cuts, according to OPEC + sources. The group meets on November 30 and December 1 to establish its framework for action.
(Edited in Spanish by Manuel Farías)