OPEC is optimistic about the recovery of the crude market, but variants of the virus pose a risk

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LONDON, Jun 29 (Reuters) – OPEC sees a strong rebound in oil demand in the second half of 2021 with a reduction in crude inventories, but the producer group also sees that variants of the coronavirus pose a risk to the recuperation.

The group expects demand to grow a total of 6 million barrels per day (bpd) in 2021, with an increase of 5 million bpd in the second half, OPEC Secretary General Mohammad Barkindo said Tuesday in the meeting of the OPEC + Joint Technical Committee, a group made up of the OPEC states, Russia and their allies.

“The current ‘wild card’ factor is the ‘Delta variant’ of the pandemic that is leading to an increase in cases and new restrictions in many regions,” he said in a speech that Reuters had access to through a copy.

Barkindo said growth in the second half was “a significant increase, even taking into account the uncertainties and associated risks,” after preliminary data for May showed that inventories in the industrialized economies of the OECD have fallen by below the 2015-2019 level.

Bringing oil inventories in line with the five-year average is one of the main objectives of the Organization of the Petroleum Exporting Countries (OPEC) and its allies.

OPEC + sources and market watchers have said they expect the group to discuss a new gradual easing of the current cuts to oil production starting in August.

Barkindo said rising sovereign debt levels, fueled by fiscal and monetary stimulus programs, were a cause for concern as it would contribute to rising inflation in the coming months.

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(Reporting by Rania El Gamal and Ahmad Ghaddar; Edited in Spanish by Ricardo Figueroa)

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