The IEA has again urged the Opec+ group to raise production faster to help ease a tightening market and cool "very high" oil prices that are putting "a huge burden" on households and economies.
Front month Ice Brent futures are just below $95/bl today, up nearly $9/bl on levels of a month ago.
"There is a significant difference between the targets that the Opec+ countries set in terms of their production levels, and what is produced today," IEA executive director Fatih Birol said at the 12th IEA-IEF-Opec Symposium on Energy Outlooks today. "It will be important that the Opec+ producers narrow this gap, and hopefully provide more volumes to the market, in order to reduce the volatility and bring the risk of high oil prices hurting the economy down."
Birol made the same call a day earlier.
The 19 countries in the Opec+ group are in the process of gradually restoring all the production they removed from the market in 2020 in response to the Covid-19 induced collapse in demand. They are increasing their collective production quota by 400,000 b/d every month through to April this year, which will be followed by monthly rises of 432,000 b/d from May until all the original cut is unwound.
But Opec+ has collectively found it difficult to keep pace with its commitment, and numerous members are struggling to raise production levels much beyond what they are now — something Birol highlighted again today.
He said the Opec+ group's actual combined production was "close to 1mn b/d" below the agreed ceiling for January. Argus found the 19 countries raised production by 260,000 b/d to 37.94mn b/d last month, which was 800,000 b/d below target.
Opec+ ministers are scheduled to next meet on 2 March to decide on production policy for April — specifically whether to proceed with another 400,000 b/d increase or to consider heeding the calls of the IEA and consumer countries and raise quotas and production by more.
