EIA urges OPEC+ group to increase oil production

OPEC+ countries need to increase supply in October to restore the balance in the oil market, disturbed by interruptions in US production, according to the monthly report of the Energy Information Administration (EIA), Report informs referring to Reuters.

Even if oil production by OPEC+ members increases, oil reserves reduced due to force majeure in the US may increase to a sufficient level only by the beginning of next year. According to EIA estimates, the market losses due to Hurricane Ida will be about 30 million barrels per day.

Currently, OPEC+ is increasing production by 400,000 barrels per day (conditions are valid until October inclusive). The meeting of the alliance members, at which a decision will be made in November, is scheduled for October 4.

In parallel, the EIA lowered its forecast for global oil demand in 2021 to 5.2 million barrels per day (5.3 million barrels per day were previously projected). The forecast for 2022 remains unchanged so far - an increase in demand by 3.2 million barrels per day.

The downward revision of the estimate is explained by the drop in global oil consumption in the third quarter this year due to the worsening epidemiological situation in Asia. Due to the spread of a new strain of coronavirus, many countries had to introduce further restrictions on movement. At the same time, the EIA believes that there are signs of stabilization, and in October, there may be a sharp rise in demand.