OPEC+ Monitoring Committee:

On Monday, October 19, a meeting of Ministers of the OPEC+ Monitoring Committee was held. The Heads of the Department did not consider the possibility of a delayed recovery of production by 1.9 million b/d. The market is expected to rebalance after March 2021.
 
"The Committee reminded all participating countries to be vigilant and proactive in the face of volatile market conditions and prospects", the final communiqué said. At the same time, the basic scenario for the development of the oil market contains more optimistic views for the coming year. It says that the OECD reserves in the fourth quarter will be only 142 million barrels higher than the five-year average. And in the first quarter of 2021, their volume will decrease to 85 million barrels above the target level. "Inventories are expected to fall below the five - year average after the first quarter of 2021", the report noted.

However, the OPEC Secretariat also allows for an alternative scenario in which the pandemic will last until the spring of 2021. In this case, the oil surplus in the first half of next year may reach 4 million b/d, but then should fall to 0.4 million b/d by the end of the year, OPEC calculated.

For reference: OPEC+ Monitoring Committee has been meeting monthly since May this year, monitoring the implementation of the deal to reduce oil production. A complex agreement until August this year obliged the participating countries to reduce oil production by 9.7 million b/d, and from August to December by 7.7 million b/d. The third stage of the agreements, which comes into force on January 1, 2021, allows OPEC+ to restore oil production by another 1.9 million b/d, so that 5.8 million b/d is already subject to restrictions. All monitoring meetings so far have focused on the accuracy of the plan. Countries that have allowed oil to be overproduced are attracting the close attention of OPEC's Leader, Saudi Arabia, and are committed to compensating for inefficient production cuts by the end of this year. The next time the Ministers of the OPEC+ Monitoring Committee will discuss the prospects of the oil market in a month, on November 17, 2020.