The crude oil market is likely To a larger-than-expected surplus this year, according to an OPEC+ report released Wednesday, as rising energy costs and tighter monetary policy put pressure on oil prices.
The report comes days ahead of OPEC+’s Sept. 5 policy meeting and more than a week after OPEC leader Saudi Arabia said the group could cut production.
The Joint Technical Committee (JTC), which advises the Organization of Petroleum Exporting Countries and a Russian-led alliance — a group known as OPEC+ — on market fundamentals, meets on Wednesday.
OPEC+ is poised to trim production amid volatility in the oil futures market, fueled by tight liquidity and a disconnect from physical markets, Saudi Energy Minister Prince Abdulaziz bin Salman said last week.
Five sources told Portal the debate on production policy beyond September and whether the group of producers will cut production has not yet started.
Oil prices have been extremely volatile in recent weeks. While Prince Abdulaziz’s comments helped propel prices to a monthly high above $105 a barrel on Monday, Brent was trading $10 below that level on Wednesday in anticipation of weaker demand.
At its most recent meeting, OPEC+ agreed to raise September production targets by 100,000 barrels per day (bpd) after reversing record cuts of around 10 million bpd it agreed in 2020 to help mitigate the impact of the to offset the pandemic.
The CTC report points out that oil demand – which is expected to rise by 3.1 million bpd this year – faces significant uncertainties, particularly with accelerating inflation and tightening monetary policy affecting consumer budgets .
“Rising energy prices represent another risk for the future,” says the report. “The latter could lead to a more significant reduction in consumption than currently expected, especially towards the end of the year.”
The CTC sees the oil market surplus at 900,000 bpd this year, 100,000 bpd higher than its previous forecast, according to a committee report seen by Portal.
In its base case, the CTC forecasts an oil market surplus of 3.1 million bpd in September, narrowing to 0.6 million bpd in October and rising to 1.4 million bpd in November.
According to the report, OPEC+ is forecasting a surplus of 900,000 bpd in its baseline scenario for next year as well.
(Additional reporting by Maha El Dahan in Dubai and Rowena Edwards in London; Spanish editing by Carlos Serrano)
From your website articles
Related articles on the Internet