UPDATE 4-OPEC+ presses for compliance with oil cuts

Published 19/08/2020, 10:50
© Reuters.
LCO
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* Wants Iraq, Nigeria, Angola, Kazakhstan to cut more
* Oil prices near 5-month highs
* Demand could reach pre-COVID levels in Q4
* Second virus wave seen as key risk to demand
* OPEC production graphic: https://tmsnrt.rs/3kUPU2h

(Updates with meeting ending)
By Rania El Gamal, Alex Lawler and Olesya Astakhova
DUBAI/LONDON/MOSCOW, Aug 19 (Reuters) - OPEC and its allies
pressed oil nations pumping above output targets to cut more in
August-September amid fears oil demand recovery was slow while
saying it could reach pre-pandemic levels by the year-end.
The group, known as OPEC+, met on Wednesday to review
compliance and left oil cuts levels unchanged. Cuts would deepen
this month and next because of compensation by Iraq, Nigeria,
Angola and Kazakhstan for overproduction in May-July.
"Based on the average projections of various institutions,
including OPEC, EIA and the IEA, it is estimated that the world
will reach about 97% of pre-pandemic oil demand during the
fourth quarter - which is a big recovery from the huge falls in
April and May," said Saudi Energy Minister Prince Abdulaziz bin
Salman.
OPEC+ has previously eased output cuts levels to 7.7 million
barrels per day (bpd) from August versus a record high 9.7
million bpd - or 10 percent of global supply - between May and
July 2020 - to balance supply with collapsing demand.
OPEC alone traditionally produced well over 30 million bpd
of oil over the past decades but after this year's cuts its
output stood at 20-22 million bpd.
The virtual meeting on Wednesday only discussed compliance
by countries such as Iraq, Nigeria, Angola and Kazakhstan.

The countries within OPEC+ overpoduced in May-July and would
compensate those volumes in August-September, OPEC+ said in a
statement without disclosing exact figures.
"It is very important to maintain full conformity," said
Russian Energy Minister Alexander Novak, who had tested positive
for coronavirus and joined the virtual meeting from home.
"We should endeavour to put this temporary compensation
regime behind us, by clearing all the past over-production by
end of September," said Prince Abdulaziz.
The next OPEC+ ministerial panel is scheduled for Sept. 17.
Brent crude LCOc1 is trading near a 5-month high above $45
a barrel and has more than doubled since hitting a 21-year low
below $16 in April, helped by the OPEC+ deal. O/R
Many OPEC members need high oil revenues to balance their
budgets but also want to avoid allowing oil prices to run well
above $50 per barrel as it would encourage a resurgence in U.S.
shale production.

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GRAPHIC -OPEC production https://tmsnrt.rs/3hgDEqs
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(additional reporting by Ahmad Ghaddar; Writing by Dmitry
Zhdannikov; editing by Jason Neely, Kirsten Donovan, Grant
McCool)

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