Oil prices recorded some marginal gains as the market awaits the OPEC+ meeting later this week as well as have an eye on the spread of the delta variant of Covid-19.
The group is optimistic ahead of the decision on whether to ease the production cuts more than what is expected on July 1 as it believes that the overall conditions in the oil market have significantly improved in recent months.
According to oilprice.com, the Brent crude went up by 0.68% to close at $75.19 on Tuesday, the American headline crude, the WTI rose by 0.74% to close at $73.45, the Bonny light crude was down by 1.13% to close at $74.24, while the OPEC basket declined by 0.47% to close at $73.84.
What the OPEC Secretary-General is saying
The OPEC Secretary-General, Mohammed Barkindo, at the meeting of the Joint Technical Committee (JTC), on Tuesday, said, “The overall brighter picture in relation to the pandemic recovery efforts has led to significantly improved oil market conditions and prospects for future growth.’’
The JTC meeting, which precedes the Joint Ministerial Monitoring Committee (JMMC) scheduled for Wednesday and the OPEC+ ministerial meeting on Thursday, discussed the latest oil market developments and the future prospects of economic and oil demand growth.
Barkindo said, “A combination of improving market indicators and the ongoing commitment of DoC countries to restore stability to the global oil market suggests that we are on the right path to recovery from the #COVID19 pandemic, despite lingering uncertainties.’’
Barkindo noted that the OPEC+ alliance is pleased to see the steady reduction in inventories that were alarmingly nearly at tank tops last year at the height of the pandemic.
Analysts have suggested that the group is expected to decide on Thursday to further ease the cuts as of August 1.
What you should know
Oil prices have climbed nearly 50% this year as key economies such as the U.S., U.K. and China have relaxed restrictions and reopened, encouraged by mass vaccination campaigns. Crude inventories in China, the world’s biggest importer of crude oil, have dwindled to the lowest this year.
As India emerges from a deadly coronavirus surge, an uptick in local fuel consumption has prompted the nation’s biggest refiner to boost production.
Barkindo was quoted to have said in the meeting the commercial oil stocks in Organisation for Economic Co-operation and Development (OECD) countries have already fallen below the 2015-2019 average, with respect to May 2021 data, and were 275 million barrels lower than at this time last year.
