Upcoming ministerial meeting of OPEC+ is of critical importance

Upcoming ministerial meeting of OPEC+ is of critical importance

In April the 13 countries agreed to take 9.7 million barrels per day (bpd) out of the market to restore balance. They agreed on a sliding scale of trimming cuts to 7.7 million bpd mid-year and 5.8 million from Jan. 2021. These cuts cost the OPEC nations dearly, because member countries are hit by the double whammy of reduced volumes and lower prices. There is discord between traders' optimism based on the hopes of vaccines on the horizon and the reality of demand, especially in North America and Europe.Demand is a tale of two sides: West of Suez, which looks challenging, and east of Suez, where the economies, particularly in China but also increasingly India, have been growing and, with it, oil demand.Markets were slowly rebalancing, however a second wave of the pandemic necessitated both OPEC and the International Energy Agency to revise downward their forecasts for the remainder of this year and next.The Paris-based agency sees demand for 2020 to be 8.8 million bpd below 2019 levels in 2020, and around 3 million bpd below pre-COVID levels in 2021.Libya, which is exempt from the OPEC+ cuts, has restarted production and added around 1 million bpd, which are set to