OPEC and its allies fear a prolonged second wave of the Covid-19 pandemic and a jump in Libyan output could push the oil market into surplus next year, according to a confidential document seen by Reuters, a gloomier outlook than just a month ago. A panel of officials from OPEC+ producers, called the Joint Technical Committee, considered this worst-case scenario during a virtual monthly meeting on Thursday. In September, the panel had not seen a surplus under any scenarios it considered. Such a surplus could threaten plans by OPEC, Russia and allies, known as OPEC+, to taper record output cuts made this year by adding 2 million bpd of oil to the market in 2021. The Organisation of the Petroleum Exporting Countries (OPEC) has not indicated any plan so far to scrap that supply boost. “The earlier signs of economic recovery in some parts of the world are overshadowed by fragile conditions and growing scepticism about the pace of the recovery,” according to the document used in the panel’s monthly meeting in October.
Published in The Express Tribune, October 18th, 2020.
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