Frank Kane

DUBAI: Oil producers opted on Wednesday to stay on course with output increases as the post-pandemic global economic recovery gathers pace.

OPEC+, the alliance led by Saudi Arabia and Russia, will add 400,000 barrels per day to the market from October, in line with the schedule to return output to pre-pandemic levels by the end of next year.

After a virtual meeting of ministers organized from Vienna, the 23-strong group said: “While the effects of the COVID-19 virus continue to cast some uncertainty, market fundamentals have strengthened and OECD stocks continue to fall as the recovery accelerates.”

Saudi Arabia, under Energy Minister Prince Abdul Aziz bin Salman, has been the leading advocate of a long-term strategy to gradually rebalance global oil markets, resisting calls to put more barrels on the market.

The latest OPEC+ meeting also heard that overall compliance continued to run at a high level — around 110 per cent — and called for compensation for past overproduction to be completed by the end of this year.

There were other encouraging signals for the global market. US oil stocks fell by more than twice what had been expected as Americans took summer trips, and an OPEC analysis forecast a tightening oil market this year as economic activity resumed, though flipping into surplus supply in 2022.

Paul Young, Asia head of consultancy Quantum Commodities Intelligence, told Arab News: “It sends a strong signal that the OPEC+ group is confident in economic growth going forward after the oil demand wobble in August.

“OPEC+ will retain the flexibility to adjust numbers if things change in the fourth quarter, but we should see the market looking toward 2022 policy now.”