This may complicate decision-making in the Organization of the Petroleum Exporting Countries and its allies, the cartel known as OPEC+, although several sources said that there has been no discussion so far about stopping the planned production increases.
The Council of the Economic Committee met for OPEC, a panel of experts advising ministers, this week ahead of the ministerial meeting for OPEC+ On the second of December.
A source in OPEC, told Reuters, that the council expects the withdrawal of oil stocks to increase the surplus in the global market by 1.1 million barrels per day. The Organization of the Petroleum Exporting Countries has warned in the past few days of an expected oversupply in 2021.
The source said the council expects a surplus of 400,000 bpd in December, reaching 2.3 million bpd in January and 3.7 million bpd in February if consuming countries go ahead with withdrawals.
And Bloomberg Agency had earlier published the results of the meeting of the Council of the OPEC Economic Committee.
On Tuesday, the United States said it would withdraw 50 million barrels of… oil of strategic reserves in coordination with similar operations in China, India, South Korea, Japan and Britain in an attempt to calm prices after OPEC + ignored calls to pump more crude.
Biden, whose popularity is plummeting ahead of next year’s congressional elections, was disappointed after OPEC+ ignored his repeated requests to pump more oil. US retail gasoline prices rose more than 60 percent last year, the fastest rate of increase since 2000.
For its part, Goldman Sachs estimated the total volume of withdrawals at 70 million to 80 million barrels, which is less than the volume of global consumption in one day, and described this as “a drop in the ocean.”
OPEC + has resisted calls from Washington to do more as it gradually rolls back production cuts that will amount to 3.8 million barrels per day at the end of December.
The organization has worked to increase the target production by 400,000 barrels per day every month since August, saying that these quantities are sufficient due to the surplus expected to be witnessed in the oil market during the next year.
Some market analysts, including JP Morgan, pointed out that OPEC Production increases may be halted temporarily after inventories are drawn down oil by major consumers.
Sources said in OPEC+ told Reuters that the organization has not yet started any discussions about stopping a planned increase in production in January, and Minister oil Al-Iraqi said Thursday that OPEC + must adhere to its current plan.
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