OPEC+, Plans to Increase Oil Production by 2 Million Barrels per Day from August... Signs of Oil Demand Recovery?

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] OPEC+ (the Organization of the Petroleum Exporting Countries (OPEC) member countries and non-OPEC allies) is reported by the Wall Street Journal (WSJ) on the 12th (local time) to plan an increase in production by 2 million barrels per day starting in August.

According to the report, major OPEC+ countries are scheduled to hold a meeting on the 15th to discuss production adjustment issues.

WSJ cited an OPEC official saying that Saudi Arabia proposed to OPEC+ to increase daily crude oil production by 2 million barrels.

OPEC+ had agreed in April to cut production by 9.7 million barrels per day until June, and this measure was extended until July.

WSJ added, "The decision to increase production was made based on the judgment that crude oil demand is recovering to pre-COVID-19 levels," and noted that the International Energy Agency's (IEA) announcement that the decline in oil demand has passed the worst phase also influenced the decision.

Earlier, in a report released last week, the IEA stated that the worst impact of COVID-19 on oil demand has passed, and although the effects will continue into the second half of the year, the market is expected to show a gradual recovery.

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