The oil market will have a small surplus of just 0.4 million barrels per day in 2022, much less than previously forecasted, according to OPEC+, due to underproduction, Reuters reported OPEC+ sources saying.
The report comes days ahead of an OPEC+ policy meeting on 5 September and over a week after OPEC leader Saudi Arabia said the group may cut oil output.
The Joint Technical Committee (JTC), which met yesterday, advises the Organisation of the Petroleum Exporting Countries and allies led by Russia, collectively known as the OPEC+ group of oil-producing nations, on market fundamentals.
Last week, Saudi Energy Minister Prince Abdulaziz Bin Salman said OPEC+ is ready to cut output amid volatility in the oil futures market, driven by thin liquidity and a disconnect with physical markets.
Five sources told Reuters that discussions are yet to begin on production policy beyond September and whether the producer group would cut output.
Oil prices have been extremely volatile in recent weeks. While Prince Abdulaziz’s comments helped propel prices to a one-month high above $105 a barrel on Monday, Brent crude traded $10 a barrel below those levels yesterday, on expectations for lower demand.