Oil prices received a boost following June’s meeting of the OPEC+ group, after it announced that it was not going to revise its planned increase of 840,000 barrels per day (bpd) in July.
Higher oil prices will be welcome news for oil and lubricant producers like Exxon Mobil, which have suffered financially from the large drop in demand for oil products in the wake of the COVID-19 pandemic.
Speaking at the Joint Ministerial Monitoring Committee meeting before the full OPEC+ monthly meeting, Mohammad Barkindo, OPEC’s Secretary General, said:
“The projections for oil are largely unchanged from our last meeting, with demand expected to grow by 6 mb/d to around 96.5 mb/d on average for the year, an increase of 6.6%. As with the economy, the market outlook for later this year looks especially promising.”
Barkindo added that the group also expects demand to exceed 99 million bpd in the final quarter of the year. This is despite a considerable element of uncertainty remaining with regards to Asia, with some countries having experienced a resurgence of COVID-19 cases, indicating that the group may be preparing for production increases later in the year.
Iranian oil may also return to the markets, should the country come to an arrangement with the United States about lifting sanctions. While this could potentially disturb the delicate market balance, Barkindo said he expected that the return of oil exports from Iran should happen in a transparent and orderly way that would preserve the comparative stability the group had managed to achieve.