Rising Demand Optimism Likely to Counterbalance Raise in OPEC Oil Output in January

As per the statement released by Goldman Sach, the promising roll-out of Coronavirus vaccine is likely to normalize demand in global petrochemical demand in line with OPEC’s decision of ramping up operating rates from next month. The recent agreement states that Russia along with other members of OPEC are applying a surge in operations by 500000 barrels per day from January.

The upcoming shift is likely to adhere an increment in oil output by around 1 percent in the international oil market. In early meetings, the decision was pushed back by several countries of OPEC Plus including United Arab Emirates under the fears of mounting inventories amidst the ongoing pandemic woes. In order to ease tensions, countries forming the agreement have decided to hold a meeting every month to discuss on the future output levels. Thus, after several resentments, all participants have affirmed for a gradual increase in the output with consistent watch on the global petrochemical market. Although several oil producing countries are still under dilemma as more production might increase revenues but could also dampen the prices in case of an astonishing dive in demand especially amid the prevailing uncertainties of another wave of infections over the winter season. As the oil market suffered devastating downfalls last year, OPEC and other participating allies applied deep production cuts to balance the demand crises in between April to September.

As per ChemAnalyst. “As OPEC contributes around 83 percent of the total oil imports to India, this decision could highly favour the domestic market as it is perceived to strike stability to the fluctuating oil prices in the coming months.”