The roadmap to unwinding historically deep production cuts continues to be adhered to. Opec+ agreed during a swift 4 January ministerial meeting to ease its production cuts by a further 400,000 b/d in February, in line with the path agreed on in July (MEES, 23 July 2021). This is despite the alliance’s own forecasts pointing to sizeable oversupply this quarter.

As a result, the ceiling for Opec+ production will rise to 39.14mn b/d next month (see table), which is 2.96mn b/d below the alliance’s 42.1mn b/d baseline. To put that in perspective, the initial phase of cuts under the April 2020 agreement represented a 9.7mn b/d cut for May-July 2020 (MEES, 17 April 2020). Around 70% of the cuts have now been unwound. (CONTINUED - 928 WORDS)