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OPEC+ Oil Boost to Leave Market in Precarious Balance, IEA Says

OPEC+ Oil Boost to Leave Market in Precarious Balance, IEA Says

(Bloomberg) — The outlook for oil “remains fragile” as the pandemic depresses demand, and OPEC’s plans to increase supply next year will leave global markets precariously balanced, the International Energy Agency said.

“There is a risk that the demand recovery is stalled by the recent increase in Covid-19 cases in many countries,” the IEA said in its monthly market report.

At the same time, markets are set to receive fresh supplies in January as OPEC and its partners relax some of the measures they’ve taken to prevent a glut. Once the taps are opened, “there is only limited headroom for the market to absorb” anything more, the Paris-based agency said.



text: A Precarious Balance


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A Precarious Balance

The acceleration in virus infections is leading many in the market to question if the Organization of Petroleum Exporting Countries and its allies will increase supply from January. Producers inside the group are also having doubts, according to delegates. Still, United Arab Emirates Energy Minister Suhail Al Mazrouei said on Tuesday that, for now, OPEC+ plans to proceed with the supply boost as scheduled.

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Global oil demand remains on track for an unprecedented 8% slump this year because of the economic fallout from the virus. To offset the drop, and prop up prices, the OPEC+ alliance led by Saudi Arabia and Russia has made vast reductions in output.

Also see: Saudi Prince and Putin Urge OPEC+ Compliance as Oil Prices Sag

Their measures have “shown some success,” depleting the world’s swollen inventories in the third quarter at a rate of 900,000 barrels a day, the IEA said. Crude futures are hovering just above $40 a barrel in London.

Inventory Drop

Yet the declines in inventories will slow markedly in the first half of next year, the report showed.

Having phased out some of

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OPEC Sees Market for Its Crude Shrink Again as Rivals Recover

OPEC Sees Market for Its Crude Shrink Again as Rivals Recover

(Bloomberg) — OPEC trimmed estimates for the amount of crude it will need to pump in the coming year, days before ministers are due to assess the impact of supply curbs on world markets.



a train yard with many barrel: Rail wagons for oil, fuel and liquefied gas cargo stand in sidings at Yanichkino railway station, cose to the Gazprom Neft PJSC Moscow refinery in Moscow, Russia, on Monday, April 27, 2020. Oil prices plunged to within a whisker of $10 a barrel after a major index tracked by billions of dollars in funds bailed out of near-term contracts for fear prices may turn negative again.


© Bloomberg
Rail wagons for oil, fuel and liquefied gas cargo stand in sidings at Yanichkino railway station, cose to the Gazprom Neft PJSC Moscow refinery in Moscow, Russia, on Monday, April 27, 2020. Oil prices plunged to within a whisker of $10 a barrel after a major index tracked by billions of dollars in funds bailed out of near-term contracts for fear prices may turn negative again.

The Organization of Petroleum Exporting Countries downgraded supply forecasts as its rival producers in the U.S. weather the impact of low prices, and as the resurgent pandemic continues to weigh on global demand.

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The crude-producer group and its allies are due to hold a monitoring meeting on Monday to consider whether unprecedented output cuts they’ve made this year are managing to keep the global market in balance.

The coalition, led by Saudi Arabia and Russia, is set to relax the curbs at the start of next year and restore some more supplies, but delegates are growing increasingly concerned about whether markets can absorb additional barrels.

Compared with last month’s report, the organization trimmed estimates for the supply it will need to provide this quarter by 900,000 barrels a day, to 27.46 million a day. An even bigger reduction was made in September. OPEC is pumping far below this level in order to implement the supply pact.

Projections for supplies outside the group for the period were boosted by 680,000 barrels a day, concentrated in the U.S. Global demand estimates for the quarter were cut by 220,000 barrels a day. For 2021, the “call on OPEC” was

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