OPEC+ has limited room to increase oil production as this could put pressure on oil prices at a time when supplies from the US, Brazil and Guyana are increasing, a view echoed by BP chief economist Spencer Dale. Bloomberg.
“They will also be nervous about bringing oil back into the market because if they do that, the overall supply will increase faster than demand and that will create instability in the market,” Dale told reporters in New Delhi, adding that the decision was up to the cartel itself.
The global oil market could swing from a deficit to a surplus in the next quarter if the agency sticks to plans to restart previously cut production from October, according to the International Energy Agency. OPEC and its allies have held back supply for nearly two years to support prices.
At the same time, oil has lost almost all its ground this year due to a weak Chinese economy that has offset the reduction in OPEC+ supply, leaving the oil market uncertain about whether OPEC+ will ease some of its production cuts.
Dale added that in addition to demand, tensions in the Middle East, supply disruptions and weather conditions will also determine oil prices next year.
Before that, Gennady Shmal, President of the Russian Oil and Gas Industry Association, noted The “oil needle” is driven by countries that do not have oil and are heavily dependent on it. Russia, on the contrary, sees the benefit of using its resources for the benefit of the people.
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Source: Gazeta
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.