The OPEC secretariat presented OPEC countries + oil market development scenarios for the coming months if the countries agree to reduce oil production by 10 million barrels per day, TASS reported referring to Energy Intelligence.
OPEC traditionally presents market development reviews before the ministerial meeting. The latest such report contained two scenarios. The first one has been designed under the condition that there are no restrictions on oil production and taking into account the production by Saudi Arabia of more than 12 million barrels per day instead of the previous 9.7 million barrels.
According to the second scenario, all OPEC + countries, including Russia, are reducing production as a whole by 10 million barrels per day until the end of the year.
However, these scenarios do not mean that consensus between Russia and Saudi Arabia was reached on the eve of the talks. There are no final proposals on the allocation of quotas within OPEC +, TASS sources confirm. Moreover, partners will not only determine individual volumes of reduction, but also the level from which it is necessary to reduce. President Vladimir Putin, speaking at the end of the meeting with the oil industry workers, said that the starting level could be taken as the average level of production in the first quarter, Saudi Arabia is in favor of cutting off the level at the beginning of April.
If countries fail to agree at a meeting on April 9, then global oil supply in the second quarter will exceed demand by 14.7 million barrels per day, OPEC expects. This will lead to the disappearance of free storage capacity by the end of the second quarter.
According to OPEC forecast, global oil consumption in 2020 will fall by an unprecedented 6.8 million barrels per day, and in the second quarter - by 11.9 million barrels per day. These forecasts look much more optimistic than the estimates of other analysts, who suggest that the supply exceeded demand by 20 million or even 30 million barrels per day.