Having just recently agreed a new production quota, which along with vaccine hype has spurred oil prices to their highest since March, OPEC just reduced projections for global fuel consumption in the first quarter of 2021 by 1 million barrels a day, it said in a monthly report.
Demand will increase by just 500,000 barrels from that quarter — the same amount the cartel and its partners agreed they’ll add in January.
This sent WTI back below $47…
As Bloomberg reports, the 23-nation OPEC+ coalition led by Saudi Arabia and Russia will meet on Jan. 4 to consider whether they can press on with further monthly increases.
“Uncertainties remain high, mainly surrounding the development of the Covid-19 pandemic and rollout of vaccines, as well as the structural impact of Covid-19 on consumer behaviors, predominantly in transportation sector,” OPEC’s Vienna-based secretariat said in the report.
The alliance is currently idling 7.7 million barrels a day, or about 8% of global output. In three weeks, it will decide whether the January increase should be followed by another addition of as many as 500,000 barrels a day as it sets about reviving a total of 2 million barrels.
Additionally, stockpiles in developed nations remained 200 million barrels above their five-year average in October, according to OPEC’s report.