OPEC Sees Weaker Outlook as Demand Falters, Shale Recovers

OPEC downgraded its outlook for the global oil market a few days before ministers meet, amid faltering demand and signs of a recovery in supply from U.S. shale drillers. The figures raise questions about the group’s decision to ease production cuts last month. The Organization of Petroleum Exporting Countries added 760,000 barrels a day to global markets in August, just as its analysts were revising down demand for its crude by more than 1 million barrels a day.

OPEC and its allies will hold an online monitoring meeting on Thursday to assess whether the vast production curbs they’ve been making are still sufficient to stave off an oil glut as the resurgence of coronavirus batters the world economy.

Oil prices slipped further below $40 a barrel in London on Monday, close to their lowest in more than two months, as companies from BP Plc to Trafigura Group made ominous predictions about consumption.

OPEC+, the 23-nation alliance spanning cartel nations like Saudi Arabia and non-members such as Russia, had agreed to taper some of the supply cutbacks made during the depths of the pandemic amid expectations that economic activity was recovering.

This month’s report from the organization’s secretariat in Vienna suggests the move might have been premature.

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