Oil traders expect the Organization of the Petroleum Exporting Countries (OPEC) and Russia to end last year’s production cuts this week, news agency reports Bloomberg Sunday. Global oil production may need to be ramped up again, analysts say.
Oil prices have now returned to pre-corona levels and the large stock built up last year is shrinking at a rate that has not been seen in twenty years. In addition, oil production in the US state of Texas has come to a standstill due to icy cold.
Oil cartel OPEC and Russia are meeting this week and then possibly canceling production cuts from last year. That is not certain, because Saudi Arabia in particular is urging other producers to remain cautious due to the persistent threat of the corona crisis.
The corona pandemic caused demand for oil to plummet in 2020. Analysts expect that if OPEC does not decide to increase production or to an insufficient degree, it could lead to a rapid and sharp rise in oil prices.
In January, Saudi Arabia, the world’s largest oil exporter, came with surprising news to cut its own production by 1 million barrels per day in February and March. This week it will also become clear whether the Saudis want to pump up more from April.