Oil Market Eyes Pressure from Tropics and Saudi Arabia

Oil Market Eyes Pressure from Tropics and Saudi Arabia
Rigzone panelists offer their views on what to watch in the oil and gas markets this week.

(The views and opinions expressed in this article are those of the attributed sources and do not necessarily reflect the position of Rigzone or the author.)

Different types and degrees of pressure may figure prominently in the oil market this week, based on predictions from regular Rigzone prognosticators.

On the one hand, OPEC kingpin Saudi Arabia will likely continue to apply greater pressure on others in OPEC+ who fail to abide by the alliance’s production curbs. On the other, the low-pressure weather system Tropical Storm Beta could lead to flooding on the U.S. Gulf Coast – home to extensive energy infrastructure.  Find out more in this latest installment of what to watch in the oil market.

Tom McNulty, Houston-based Principal and Energy Practice leader with Valuescope, Inc.: The Saudis continue to try to keep OPEC+ in line, but as we move deeper into the fall the reality will become “if you ain’t cheatin’, you ain’t tryin’.” Production will rise, keeping prices where they are now.

Tom Seng, Director – School of Energy Economics, Policy and Commerce, University of Tulsa’s Collins College of Business: All eyes will continue to be focused on the tropics as the recent level of activity has been unprecedented. OPEC, while not reversing the output increase that went into effect Aug. 1, is still pressuring member nations who have not met their prior curtailment obligations. Meanwhile, Saudi Arabia’s energy minister is warning “short” traders that they may face action by the cartel that will hurt those positions. Of course, the cartel would have to curtail output  again for that threat to have any impact.

Andrew Goldstein, President, Atlas Commodities LLC: Oil product tanker companies have been receiving increased inquiries for storage and the amount of fuel being held at sea has been on the rise. As the threat of a second wave of COVID-19 rises across Europe, interest for floating storage should begin to rise, specifically for refined products like jet fuel and diesel.

To contact the author, email mveazey@rigzone.com.


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