OPEC and allies, known as OPEC+, are considering rolling over oil production cuts from March into April instead of raising output because of fragile oil demand recovery due to persisting worries about the coronavirus, three OPEC+ sources told Reuters.
OPEC+ ministers hold a full meeting on Thursday.
The market had been widely expecting OPEC+ to ease production cuts, which have been the deepest ever, by around 0.5 million barrels per day (bpd) from April.
OPEC’s leader, Saudi Arabia, had been also expected to end its voluntary production cut of 1 million bpd.
But on Wednesday three OPEC+ sources said some key OPEC members have suggested keeping OPEC+ output unchanged in April. It was not immediately clear whether Saudi Arabia would end voluntary cuts in March or extend them further, they added.
Oil prices jumped by about $1 per barrel on the news to trade near $64 per barrel.
On Tuesday, a document by OPEC+ experts, seen by Reuters, called “for cautious optimism,” citing “the underlying uncertainties in the physical markets and macro sentiment, including risks from COVID-19 mutations that are still on the rise”.
It said it believed a recent oil price rally might have been caused more by financial players rather than improvements in physical oil market fundamentals.
OPEC expects global oil demand in 2021 to grow by 5.8 million bpd to about 96 million bpd. That compares with about 100 million bpd in 2019, before demand plummeted in 2020 due to the pandemic.