In a World With Too Much Oil, OPEC+ Sweats Its Next Move - Bloomberg

In a World With Too Much Oil, OPEC+ Sweats Its Next Move - Bloomberg:

The world is awash with oil. Yet, in less than eight weeks, OPEC+ is set to pour even more barrels into the glut.

For many in the oil market, it’s the wrong move. Increasingly, some inside the OPEC+ coalition are also wondering if the group should reconsider.

“We do not need the extra oil,” said Marco Dunand, co-founder of Mercuria Energy Group, one of the world’s largest commodity trading houses.

When OPEC+ cut its production in May as the pandemic ravaged demand, it announced an aggressive three-phase plan. First the deepest reduction: nearly 10 million barrels a day were taken out. Then, an easing of the cuts to about 8 million barrels a day. A third phase is due to start in January, when the cuts should be tapered to just 6 million barrels.

But now OPEC+ is debating how to proceed. Inside the cartel, the mood is turning somber. The demand recovery is slower than expected, and inventories aren’t shrinking as quickly as OPEC+ anticipated just a couple of months ago. Oil prices, too, are lower than many member states had hoped.