Abu Dhabi National Oil Company (ADNOC) plans to boost its oil exports in August, the first signal that OPEC and its allies are preparing to ease record oil output cuts next month, three sources familiar withthe development told Reuters.
The Organization of the Petroleum Exporting Countries and allies led by Russia, known as OPEC+, have been cutting oil output since May by a record 9.7 million barrels per day after the coronavirus crisis destroyed a third of global demand.
After July, the cuts are due to taper to 7.7 million bpd until December although a final decision has yet to be taken. Key OPEC+ ministers hold talks next week.
Industry and trading sources said ADNOC plans to raise its crude oil exports by as much as 300,000 barrels per day in August, citing oil loading programs by the company.
Coronavirus: OPEC says oil, fuel demand will remain ‘under pressure’ for rest of 2020
Gulf OPEC producer the United Arab Emirates will pump according to its output quota under the OPEC+ agreement, which is 2.590 million bpd, up from 2.446 million in July, the sources familiar with ADNOC’s exports and production plans said.
ADNOC declined to comment.
ADNOC has notified its customers of its plans to cut crude oil nominations for August by 5 percent for all grades in line with OPEC+ pact to reduce oil supplies, a source told Reuters last month.
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Last month, OPEC+ sources told Reuters that OPEC and Russia will likely ease record oil production cuts from August as global oil demand recovers and prices have bounced back from their lows.
Oil prices have recovered to above $43 a barrel from a 21-year low below $16 a barrel in April, helped by OPEC+ cuts and a recovery in demand as governments ease coronavirus lockdowns.
Saudi Arabia, OPEC’s de facto leader, and Russia have to perform a balancing act of pushing up oil prices to meet budget needs while not driving them too high to avoid a resurgence of US shale production.