OPEC ‘cautiously optimistic’ oil market will recover in 2021

OPEC’s secretary general said he was cautiously optimistic the oil market would recover this year from the slump in demand brought on by the coronavirus pandemic.

Monthly meetings of the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia - a group known as OPEC+ - are there to stop an imbalance from re-emerging, OPEC’s Mohammad Barkindo told a virtual forum.

“We all agree that the recovery is fragile, there are still more uncertainties, but we are cautiously optimistic that the recovery will materialise this year,” Barkindo said at the Atlantic Council Global Energy Forum.

Oil prices have rallied to an 11-month high this month, helped by a Jan. 5 decision by most members of OPEC+ to hold production steady in February and a pledge by Saudi Arabia to voluntarily cut output.

India’s oil minister, Dharmendra Pradhan, said at the same event that the unexpected move to cut output by some OPEC nations had led to a price rally and was creating confusion for consuming countries.

“This kind of scenario will push us to more alternative methods of energy sourcing,” Pradhan said.

Barkindo, in response, said OPEC+ needed to be flexible and had stable markets as its target.

The energy minister for OPEC member the United Arab Emirates earlier told the same event he saw the start of the market recovery this year.

“This year the way we see it is a year of recovery, whether it’s going to be the end of the year where we are supposed to reach the balance or the beginning of 2022,” Suhail al-Mazrouei said.

The UAE minister also said he saw good oil demand growth in China and India as more countries begin their coronavirus vaccination campaigns.