OPEC+ Extends Output Cuts into April

The Organization of the Petroleum Exporting Countries (OPEC) and its partners, forming an alliance known as OPEC+, agreed on Thursday to extend most crude oil production cuts until the end of next month.

While Russia and Kazakhstan were allowed limited eases in output curbs, of 130,000 barrels per day (b/d) and 20,000 b/d, respectively, Saudi Arabia has vowed to continue its voluntary production cut of one million barrels a day, but the kingdom is set to gradually phase out the cuts in the near future.

Producers agreed that despite crude prices recently returning to their levels prior to the Coronavirus pandemic, the market remains fragile.

Last month, OPEC revised down its demand expectations, forecasting global demand for crude oil will rise by 5.8 million b/d in 2021, decreasing its previous expectations by about 100,000 b/d, due to extended lockdowns and the re-introduction of partial lockdowns in a number of countries.

“At the same time, positive developments on the economic front, supported by massive stimulus programs, are expected to encourage demand in various sectors in H2 of 2021,” OPEC’s last month’s report noted.