Page 10 - AfrOil Week 14 2021

AfrOil PERFORMANCE AfrOil

In early February, the UN-supported intra-Lib- that bribery helped secure him the post. The UN
yan Political Dialogue Forum designated Abdul Panel of Experts has begun investigating the
Hamid Mohammed Dbeibah as temporary reports.
prime minister until national elections are held Meanwhile, Libya’s eastern legislative body,
in December this year. the House of Representatives, is due to carry
The legitimacy of the new prime minister’s out a vote of confidence on Dbeibah’s cabinet
mandate has already been marred by allegations line-up this week. ™

OPEC+ to ease open the taps in May

MULTILATERAL THE OPEC cartel and its allies have agreed to level of stocks, which have considerably fallen as
ease production cuts in May following their demand increases,” Russia’s Novak said. “Vacci-
monthly meeting, with 350,000 barrels per day nation is already yielding positive results so that
(bpd) of supply set to return next month. demand is recovering.”
A further 350,000 bpd will be restored in
June and around 400,000 bpd in July. Saudi Ara- Analysis
bia is expected to return a further 250,000 bpd “The decision by OPEC+ shows that patience
of oil to the market next month, having made a was exhausted among producers, who could
voluntary 1mn bpd cut earlier this year. not accept that some countries – mainly Russia –
Under the new agreement, OPEC+ will pro- were allowed to constantly hike their production
duce 6.5mn bpd less oil than the baseline in May, while others kept it flat,” Rystad analyst Louise
versus 7mn bpd currently. The group agreed to Dickson said. “The outcome of the meeting is
take an unprecedented 9.7mn bpd of supply also revealing that even though the group’s own
offline this time last year in response to the experts warned about the lagging oil demand
oil price collapse triggered by the coronavirus recovery and the market risks that the extended
(COVID-19) pandemic. lockdowns are bringing, decision-makers have
OPEC+ member Kazakhstan has said it another vision.”
will produce more oil in May and June, but has Rystad said the market was set to be bal-
not disclosed numbers. Russian Deputy Prime anced in May, with heavy maintenance taking
Minister Alexander Novak, meanwhile, told the place across several countries and the delay to
Rossiya-24 TV channel that his country would the Luanda refinery expansion in Angola. “By
increase oil production by a total of 114,000 bpd mid-summer, we expect the vaccine hiccups
across the three-month period. to be a distance memory, and for many devel-
However, with coronavirus case numbers oping countries to be nearing 50% vaccination
once again on the rise in Europe and other rates,” Dickson continued. “Thus, we still expect
regions, Saudi Energy Minister Prince Abdu- end-user demand to pick up over the summer
laziz bin Salman warned that any decision could as economies open, and in line with seasonal
be “tweaked” in OPEC+’s meeting next month. demand.”
“The reality remains that the global picture is far Extra supply and rising demand should push
from even, and the recovery is far from com- implied stocks to a nearly 3mn bpd deficit by
plete,” the minister said ahead of the meeting. August, according to Rystad.
The oil price recovery that began in late 2020 Wood Mackenzie said the deal aligned with
began to falter in March, indicating that fuel its analysis for the second and third quarters of
demand is not picking up as fast as producers 2021. “We see the supply and demand balance
might have anticipated. Still, Brent has remained tightening in both quarters with global stock
above $60 per barrel, feeding into bullish senti- draws in each,” Wood Mackenzie vice-president
ment about the outlook for the rest of 2021. Ann-Louise Hittle said. “The agreement is sup-
“Today, there are figures that are much more portive of oil prices, yet should also help avoid
positive concerning the market, including the a sharp spike upward as oil demand picks up.”

(Image: OPEC)

P10 www. NEWSBASE .com Week 14 07•April•2021