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The
Joint Technical Committee, which advises the group of
oil-producing nations that includes Saudi Arabia and Russia, met
on Tuesday ahead of a ministerial meeting on Thursday to decide
output policy.
"Despite the ongoing destocking of commercial OECD stocks, they
remain above the 2015-2019 average, while recognising that
prevailing volatility in the market structure is a signal of
fragile market conditions," the panel said in the report.
Under its base case scenario, it now expects oil demand to grow
by 5.6 million barrels per day this year, down by 300,000 bpd
from its previous forecast.
It also raised its global supply growth forecast by 200,000 bpd
to 1.6 million bpd.
As a result, it now sees oil stocks in the industrialised world
dipping below the 2015-2019 average in August, a month later
than it previously forecast.
OPEC and allied producers, a group known as OPEC+, are currently
curbing output by just over 7 million bpd in a bid to support
prices and reduce oversupply. Saudi Arabia has added to those
cuts with an additional one million bpd.
Saudi Arabia is prepared to support extending oil cuts and is
also ready to prolong its own voluntary cuts, a source briefed
on the matter told Reuters on Monday.
JP Morgan in research note said it believes OPEC+ will tread
cautiously by largely rolling over its production cuts into May
and that Saudi Arabia will extend its additional cut until the
end of June.
"We expect the alliance to start adding production in 500,000
bpd increments beginning in June and lasting through August,"
the bank added.
(Reporting by Rania El Gamal and Ahmad Ghaddar; editing by Tom
Hogue and Jason Neely)
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