Sources in "OPEC Plus" told Reuters that the group of oil producers meets today, Thursday, to decide on reducing production cuts further next month, and it may also consider extending its comprehensive supply agreement beyond April 2022.
The group, which consists of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, warned on Wednesday of "great uncertainty" and the risk of an oil glut next year.
The supply agreement - which was reached to counter the massive damage caused by the Corona virus pandemic to global oil demand - imposed a record reduction of about 10 million barrels per day, starting in May 2020, and ending at the end of next April.
A report issued by the “OPEC Plus” Joint Technical Committee yesterday expected a surplus of crude by the end of 2022, based on different scenarios of supply and demand.
The report said that the market will witness a short-term deficit, but a glut will appear on the horizon after the end of the "OPEC Plus" cuts.
Oil prices were trading near $75 a barrel today, up more than 40% from the beginning of the year.
The Joint Technical Committee still expects oil demand to grow by about 6 million barrels per day in 2021, but it said that there is "a great deal of uncertainty" that includes the uneven pace of the global economic recovery, the rise in sovereign debt, the unfair distribution of vaccines and the increase in infections with the delta strain of Covid-19. .
OPEC watchers said that the group could keep production unchanged when ministers meet on Thursday, or decide to increase production, perhaps by more than one million barrels per day, or just half a million barrels per day.