OPEC “cautiously optimistic” about oil demand amidst reopening of China

(Bloomberg) — OPEC’s top official said he sees a “more upbeat” economic outlook as China reopens after several years of virus restrictions.

“There’s a positive mood and optimism, which I must always say is cautious optimism,” Secretary-General Haitham Al-Ghais said Feb. 6 at the India Energy Week forum.

While there’s a lot of potential for oil demand this year, the “beast” of Covid-19 means there’s also the risk of volatility, Al-Ghais cautioned. Ministers from the OPEC+ coalition are just “a phone call away to step in when necessary,” he added.

Oil is trading at about $80 a bbl in London after a rocky start to the year, as traders weigh China’s resumption of travel against a renewed wave of virus cases and signs of plentiful supply.

The Organization of Petroleum Exporting Countries and its allies opted to keep output levels unchanged at a monitoring meeting last week, deciding that hefty cutbacks agreed late last year should be sufficient to stabilize markets for the time being.

At the same time, the group has indicated that despite the nascent signs of demand recovery, it’s still too early to start lifting production levels again.

“I will believe it when I see it and then take action,” Prince Abdulaziz bin Salman, energy minister of OPEC leader Saudi Arabia said on Saturday in Riyadh.