OPEC+ to Start Two-Day Meeting on Wednesday to Determine Volume of Oil Cuts in May

The Joint Ministerial Monitoring Committee (JMMC) on Wednesday will oversee the compliance of OPEC+ participants with oil production quotas. According to the International Energy Agency (IEA), compliance increased to 112 percent in February. The committee will also revise how underperforming countries are offsetting their production shortfalls from previous months.

At Thursday's OPEC Ministerial Meeting, the volume of oil production cuts in May will dominate the agenda. It remains to be seen whether the alliance of oil producers will lower output quotas or further extend the current level of production cuts, which in March stood at 7.05 million barrels a day (mbd) and in April will decrease to 6.9 mbd due to a slight increase in oil production granted to Russia and Kazakhstan.

Saudi Arabia may also announce whether it will extend its additional voluntary oil production cut of 1 mbd, which it has been enforcing since February. A source in one of the OPEC+ delegations told Sputnik that the majority of OPEC+ nations had confirmed their readiness to extend the current terms of the deal for May, while Riyadh remains committed to continuing its voluntary oil production cuts over worries about oil demand.

The prospects for increased demand in oil indeed remain lacklustre. Last month, both the IEA and the Organisation of the Petroleum Exporting Countries only slightly upgraded their forecasts and now expect demand to grow by 5.5 mbd and 5.9 mbd in 2021. Ahead of the OPEC+ meetings, OPEC Secretary General Mohammad Barkindo on Tuesday warned of remaining uncertainties and fragility in the oil market despite some positive developments.