Commodities and Futures News

OPEC+ sees tighter market in 2022, risks to oil demand growth

2022.08.31 21:33

OPEC+ sees tighter market in 2022, risks to oil demand growth
FILE PHOTO: The logo of the Organisation of the Petroleum Exporting Countries (OPEC) sits outside its headquarters ahead of the OPEC and NON-OPEC meeting, Austria December 6, 2019. REUTERS/Leonhard Foeger

By Olesya Astakhova and Ahmad Ghaddar

LONDON/MOSCOW (Reuters) – The oil market will have a small surplus of just 0.4 million bpd in 2022, much less than forecast earlier, according to OPEC+, due to underproduction of its members, OPEC+ sources said.

The report comes days ahead of an OPEC+ policy meeting on Sept. 5 and over a week after OPEC leader Saudi Arabia said the group may cut oil output.

The Joint Technical Committee (JTC), which met on Wednesday, advises the Organization of the Petroleum Exporting Countries and allies led by Russia, collectively known as the OPEC+ group of oil-producing nations, on market fundamentals.

Ahead of its Wednesday meeting, the JTC had issued a report, seen by Reuters, suggesting the oil market surplus would amount to 0.9 million barrels per day in a best-case scenario.

After the meeting the figure was put at 0.4 million bpd, two OPEC+ sources said as the group decided to include in balances significant underproduction numbers by its own members.

OPEC+ is ready to cut output amid volatility in the oil futures market, driven by thin liquidity and a disconnect with physical markets, Saudi Energy Minister Prince Abdulaziz bin Salman said last week.

Five sources told Reuters that discussions are yet to begin on production policy beyond September and whether the producer group would cut output.

Oil prices have been extremely volatile in recent weeks. While Prince Abdulaziz’s comments helped propel prices to a one-month high above $105 a barrel on Monday, Brent crude on Wednesday traded $10 a barrel below those levels, on expectations for lower demand. [O/R]

At its last meeting, OPEC+ agreed to raise production targets by 100,000 bpd for September, having unwound record cuts of about 10 million bpd that it agreed in 2020 to help counter the impact of the pandemic.

The JTC report said oil demand – which it sees growing 3.1 million bpd this year – faces major uncertainties particularly from rising inflation and tightening monetary policy which are eating in to consumers’ budgets.

“Rising energy prices pose another risk going forward,” the report said. “The latter may lead to a more significant reduction in consumption than currently anticipated, especially towards the end of the year.”

A Reuters monthly OPEC survey showed on Wednesday production rose in August to its highest level since the early days of the pandemic in 2020 but was still 1.4 million bpd below the August target, versus a 1.3 million bpd shortfall in July.

Many OPEC and OPEC+ producers are lacking the capacity to raise output due to insufficient oilfield investment as well as various Western sanctions in the case of Iran, Venezuela and Russia.

Source

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 98,555.41 4.41%
ethereum
Ethereum (ETH) $ 3,486.78 2.20%
tether
Tether (USDT) $ 0.998807 0.08%
xrp
XRP (XRP) $ 2.31 2.92%
bnb
BNB (BNB) $ 697.75 1.16%
solana
Solana (SOL) $ 196.98 3.92%
dogecoin
Dogecoin (DOGE) $ 0.337354 4.69%
usd-coin
USDC (USDC) $ 0.999653 0.14%
staked-ether
Lido Staked Ether (STETH) $ 3,481.79 2.40%
cardano
Cardano (ADA) $ 0.935736 2.08%
tron
TRON (TRX) $ 0.255685 1.39%
avalanche-2
Avalanche (AVAX) $ 41.05 5.96%
chainlink
Chainlink (LINK) $ 25.16 3.71%
the-open-network
Toncoin (TON) $ 5.87 5.00%
wrapped-steth
Wrapped stETH (WSTETH) $ 4,140.99 2.49%
shiba-inu
Shiba Inu (SHIB) $ 0.000024 6.37%
sui
Sui (SUI) $ 4.60 2.29%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 98,071.28 4.08%
hedera-hashgraph
Hedera (HBAR) $ 0.324078 10.32%
stellar
Stellar (XLM) $ 0.397771 8.18%
polkadot
Polkadot (DOT) $ 7.53 3.23%
hyperliquid
Hyperliquid (HYPE) $ 30.06 6.87%
weth
WETH (WETH) $ 3,486.02 2.20%
bitcoin-cash
Bitcoin Cash (BCH) $ 467.48 2.53%
leo-token
LEO Token (LEO) $ 9.50 1.58%
uniswap
Uniswap (UNI) $ 14.46 2.11%
litecoin
Litecoin (LTC) $ 108.07 1.98%
pepe
Pepe (PEPE) $ 0.000019 4.85%
bitget-token
Bitget Token (BGB) $ 5.04 19.34%
near
NEAR Protocol (NEAR) $ 5.55 3.16%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,679.73 2.37%
ethena-usde
Ethena USDe (USDE) $ 0.998708 0.05%
aave
Aave (AAVE) $ 371.61 3.30%
aptos
Aptos (APT) $ 9.77 2.43%
internet-computer
Internet Computer (ICP) $ 11.33 6.25%
usds
USDS (USDS) $ 0.999246 0.21%
crypto-com-chain
Cronos (CRO) $ 0.163649 2.08%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.525369 5.08%
vechain
VeChain (VET) $ 0.052623 9.51%
ethereum-classic
Ethereum Classic (ETC) $ 27.82 1.69%
mantle
Mantle (MNT) $ 1.23 3.19%
render-token
Render (RENDER) $ 7.79 2.31%
bittensor
Bittensor (TAO) $ 502.46 4.52%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.39 2.27%
mantra-dao
MANTRA (OM) $ 3.80 0.89%
whitebit
WhiteBIT Coin (WBT) $ 24.92 2.35%
monero
Monero (XMR) $ 191.28 0.83%
arbitrum
Arbitrum (ARB) $ 0.815313 2.51%
dai
Dai (DAI) $ 1.00 0.10%
filecoin
Filecoin (FIL) $ 5.44 5.95%