“An agreement was reached that in July the parameters discussed earlier will be maintained. That means that the increase In production for OPEC and non-OPEC countries will amount to 441,000 barrels per day in July,” Russian Deputy Prime Minister Alexander Novak told Rossiya 24 television after the meeting.
“You will recall that in June this total is 300,00 bpd. And in June it was also 300,000 bpd.”
Participants agreed that markets at the moment were quite balanced and world reserves of oil are gradually moving towards average levels over five years.
“We have been observing for several months on markets now a balance between supply and demand thanks, for the most part, to the agreement in place for a year now, with significant volumes removed from the market. That enabled us to reduce surplus reserves from 260 million barrels to 34 million barrels,” Novak said.
“We anticipate that in June we will arrive at the average five-year level. And that is the goal we have set. The prices we now observe on markets have been more or less stable for the last few months. That tells us that demand and production are gradually increasing, that markets are being restored and the situation on those markets is balanced.”
Saudi Oil Minister Prince Abdulaziz bin Salman said commercial oil reserves were approaching the 2015-2019 level that was being sought.
“Demand has improved on several major world markets, like the United States and China. We have also seen encouraging signs of improvement in demand in Europe as major economies are opening up cautiously,” he said.
“The fact that vaccinations are proceeding at an increasing pace is a positive development. About 1.8 million doses of vaccine have been administered. That is commendable and can only lead to a further balancing of world oil markets as reserves are gradually declining to a level close to the average 2015-2019 indicator which we use as a benchmark.”
Saudi Arabia is proceeding with its own increase in oil production levels. In May, the country boosted output by 350,000 bpd to 8.482 million bpd.
“Our production levels were carefully calculated to the letter, to the level we had proposed – 8.482 million bpd,” Prince Abdulaziz said.
As the meeting concluded, ministers decided to carry on with careful monitoring of market in order to guard against any fluctuations.
“There are still clouds on the horizon,” the Saudi minister said. “We must therefore continue our consultations and keep careful watch on fundamental market factors and take initiatives to uphold market stability.”
Prices shot upward on news that OPEC+ had taken no decision on production volumes in August and September. At the end of the day’s trading, the cost of a barrel of Brent stood at $71.14.