OPEC Move Impact Could Be Minor
(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.)
Saudi Arabia holds much sway in OPEC and on the global energy scene, but an action that it – and other OPEC members – will soon take should have just a minor effect on the oil market. So says a high-ranking Saudi official. Find out more on this and other topics in the preview below of upcoming market developments.
Andrew Goldstein, President, Atlas Commodities LLC: I look for the spot price of West Texas Intermediate (WTI) to stay in a tight range. OPEC announced that some supplies will be restored next month, but the impact will be “barely felt” as demand recovers from coronavirus, according to Saudi Arabia’s energy minister. Currently OPEC members have cut 9.6 million barrels per day (bpd). Those cuts will decrease to 7.7 million bpd in August, keeping up with demand but not flooding the market.
Tom McNulty, Houston-based Principal and Energy Practice leader with Valuescope, Inc.: Look for oilfield services (OFS) bankruptcies in the next few weeks to highlight contentious valuation issues across the space, in terms of contracts, technology and equipment. There are bid-offer spreads wide enough to drive a frac truck through and the restructurings will in some cases become very difficult to execute. Specifically, advisors who are generalists and do not really understand the OFS business will get creamed.
Mark Le Dain, vice president of strategy with the oil and gas data firm Validere: There will be a couple consecutive weeks coming up here where the full impact of the OPEC cuts will be felt with low Saudi imports.
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