By Ahmad Ghaddar, Olesya Astakhova and Alex Lawler
LONDON, May 31 (Reuters) – OPEC + will likely continue to gradually lift limits on oil supplies at its meeting on Tuesday, OPEC sources said, as producers balance expectations of a recovery in demand with a possible increase in Iranian supply.
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC +, decided in April to return 2.1 million barrels per day (bpd) of crude oil to the market between May and July, as they expected world demand to increase despite of the increase in coronavirus cases in India.
Since that decision, oil has extended its comeback this year and has gained more than 30% so far in 2021, approaching $ 70 a barrel. But the possibility of increased Iranian production due to progress in talks on reactivating its nuclear deal has limited progress.
OPEC Secretary General Mohammad Barkindo said he does not expect increased supplies from Iran to cause problems.
“We anticipate that the expected return of Iranian production and exports to the world market will occur in an orderly and transparent manner,” it said in a statement.
A meeting of the OPEC + Joint Technical Committee (JTC) was held on Monday. The JTC confirmed OPEC’s estimate of an increase in global oil demand of 6 million bpd in 2021, centered on the second half, according to OPEC + sources.
OPEC + oil ministers will attend Tuesday’s meeting.
Two other OPEC + sources said on Monday that they do not expect the group to define its production policy beyond July, as the outlook for Iranian supply is still unclear. OPEC has another meeting scheduled for June 24.
The JTC also revised global supplies down by 200,000 bpd and now expects a deficit of 1.4 million bpd in 2021, up from 1.2 million bpd previously estimated, according to a document accessed by Reuters, a signal. that inventories will decline faster than expected.
OPEC + cut production by a record 9.7 million bpd last year amid collapsing demand, and most of those cuts are still in place. Starting in July, OPEC + cuts will stand at 5.8 million bpd
(Reporting by Ahmad Ghaddar, Olesya Astakhova Alex Lawler and Vladimir Soldatkin, Edited in Spanish by Ricardo Figueroa)