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By Vladimir Soldatkin, Rania El Gamal and Ahmad Ghaddar
MOSCOW / DUBAI / LONDON (Reuters) – OPEC Group oil-producing countries, which exceeded the May-July targets, will have to cut production by more than one million barrels steadily over two months to compensate, according to OPEC resources and an OPEC-noted report through Reuters.
The manufacturers’ organization includes members of the Organization of Petroleum Exporting Countries and other oil-producing powers, adding to Russia, which committed to record cuts of 9.7 million barrels consistent with May’s day (b/d) to wipe out an excess of massive sources such as coronavirus. fuel locks destroyed. global call. As the call began to recover, the organization reduced its discounts to 7.7 million b/d in August.
Some countries, such as Iraq and Nigeria, have failed to achieve these targets and are under pressure from other OPEC members, adding OPEC’s de facto leader to Saudi Arabia to reduce production to offset oversupply from cuts to the end. September. Everything is fine.
The volume they have to reduce is 1.15 million b/d in two months, according to an OPEC source, or 2.31 million b/d in a month, according to the OPEC report.
“These compensation cuts apply to August and September and add to the production cuts of existing members,” OPEC source said.
The new relays, if distributed lightly, would mean that the effective relief in the group materials would be approximately 8.85 million b/d in August and September, the source added.
“This means that I would see a great market appeal those two months,” the source said.
OPEC countries, which will compensate for their overproduction, have until the end of next week to submit their updated production plans for August and September, OPEC resources said.
In April, the effect of the new coronavirus on air and road travel and other areas of the world economy brought the costs of the leading oil below $16 relative to the barrel. OPEC source cuts and a slow uptick in economic activity as blockades decrease led to a cost recovery of just under $44 on Friday. The continued spread of the virus threatens forecasts of a resumption of oil demand.
Chart: OPEC Table – Overproduction https://graphics.reuters.com/OIL-OPEC/rlgpdowoovo/index.html
Overloading
The actual overs offer in May is around 1.3 million b/d, and in June and July 0.5 million b/d, an OPEC source said.
In total, this equates to 2.3 million b/d over a month, or 1.15 million b/d over two months.
This represents an excess of total supply of 70 million barrels, enough to load 70 Suezmax tanker trucks.
The report that OPEC expects oil demand in 2020 to decline to 9.1 million b/d, 100,000 b/d more than in its previous forecast, before expanding to 7 million b/d in 2021.
However, it also presents a situation of choice in which a momentary wave of more powerful and prolonged infections hits Europe, the United States, India and China in the part of the year.
Under this scenario, demand is expected to decline to 11.2 million b/d in 2020, bringing OECD oil inventories in the fourth quarter to 233 million barrels above the average of the past five years, according to the report.
Inventories would be 250 million barrels over the past five years in 2021.
Accordance
Knowledge shows that among OPEC members, Iraq and Nigeria were the least fulfilled and even the United Arab Emirates, which made the most voluntary cuts in June, overproduction of around 50,000 b/d during the May-July period.
Among non-OPEC countries, Russia and Kazakhstan overproduced 280,000 b/dy 190,000 b/d respectively during the 3 months.
(Additional information via Dmitry Zhdannikov; edited through Jason Neely / Simon Webb / Susan Fenton)