FXStreet notes that full compliance by OPEC+ members will limit the increase in output from August. The next Joint Ministerial Monitoring Committee meeting is scheduled on 18 August. Rising COVID-19 case numbers could see another reduction in traffic while refinery margins have yet to recover, suggesting refiners’ demand will stay subdued, per ANZ Bank.

“OPEC+ agreed to reduce its production cuts by 2mb/d to 7.7mb/d from August. Full compliance from other members and its commitment to compensate for higher production in May and June could limit this increase to 1mb/d.”

“Demand recovery will absorb some excess, helping bring the market into balance by Q4 2020.”  

“A resurgence in COVID-19 cases remains a key risk, as renewed lockdowns could undermine the demand recovery.”