April 27, 2021 10:15 AM, EDT

OPEC+ Sticks With Plans to Gently Hike Supply

oil pump jackOil pump jacks in Russia by Andrey Rudakov/Bloomberg

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OPEC and its allies recommended proceeding with plans to gently revive oil production as global demand recovers from the pandemic, despite surging infections in India.

A committee led by Saudi Arabia and Russia agreed the coalition can skip a full-scale ministerial meeting originally scheduled for April 27, and press on with its road map for increasing supply, delegates said. The 23-nation alliance intends to restart about 2 million barrels of daily output over the next three months.

World oil consumption will rebound by a vigorous 6 million barrels a day this year, though the recovery remains at risk from virus outbreaks in India and Brazil, a panel of OPEC+ technical experts forecast on April 26. As a result, the glut of oil inventories that amassed when demand collapsed last year will be almost gone by the end of this quarter.

“We can take comfort in knowing that our leadership has helped turn the tide,” Mohammad Barkindo, secretary-general of the Organization of Petroleum Exporting Countries, said on Twitter. “But at the same time, the persistence of COVID-19 reminds us that this is no time to stray from the cautious and steadfast approach we have taken over the past year.”

Russia’s Deputy Energy Minister Alexander Novak said April 27 that there’s optimism in the oil market and global mobility is increasing. Nevertheless, OPEC+ must keep monitoring the coronavirus situation across many regions, including Asia, he said on the state-run Rossiya 24 television network.

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