The oil market is getting closer to balance as demand gradually rises, OPEC's secretary general said July 13, two days before the group and ally Russia meet to decide whether to ease output curbs from August.
OPEC and allies, known as OPEC+, have been cutting output since May by 9.7 million bbl/d after the coronavirus crisis destroyed a third of global demand and caused a price collapse.
After July, the cuts are due to taper to 7.7 million bbl/d until December although a final decision has yet to be taken. A panel called the Joint Ministerial Monitoring Committee meets on July 15 to recommend the next level of cuts.
"The gradual reopening of the economies and societies around the world has provided a much-needed resurgence in demand," while the supply cuts "have helped reverse a rapidly rising trend in inventories," OPEC's Mohammad Barkindo said.
"These supply and demand trends are helping bring us step by step closer to achieving a balanced market."
The assessment from Barkindo during a webcast presentation on July 13, suggests drastic changes to the OPEC+ deal are unlikely. He did not comment directly on whether the producers would ease the supply cut.
Still, OPEC+ sources told Reuters last month OPEC and Russia will likely ease the cuts from August.
Oil has recovered to almost $43/bbl from a 21-year low below $16 in April.
The real production increase could be less than 2 million bbl/d given Iraq and others promised to over-comply to make up for not delivering all of their cuts in May and June.
And Saudi Arabia's oil exports in August will remain the same as in July as the extra barrels the kingdom is set to pump will be used domestically, industry sources told Reuters.
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