OPEC+ Prepares to Pump More Oil
All of which is keeping inventories bloated. The world’s largest independent oil storage company, Rotterdam-based Royal Vopak NV, says that it’s almost run out of available space. Rystad predicts supply will exceed demand by 700,000 barrels a day next month, and by 2 million a day in September.
Prices are wilting in response. The rally that more than doubled Brent futures since late April has lost momentum, leaving the international benchmark stuck near $40 a barrel. It was down 2.6% at 4:51 p.m. London time on Thursday following weak U.S. economic data. A discount on early deliveries, which OPEC sought to eliminate, has only deepened.
Surplus Concerns
“OPEC’s experiment to increase production could backfire as we are still nowhere near out of the woods yet in terms of oil demand,” said Bjornar Tonhaugen, the consultant’s head of oil markets. “The balances look to be heading towards a mini supply glut for the next three to four months.”
Saudi Arabia says the impact of its own extra production will be neutralized as it burns the additional barrels at home, where demand for air conditioning surges during the summer. It is also pressing OPEC’s habitual quota cheats, like Iraq and Nigeria, to refrain from increasing production now as a gesture of atonement.
If that doesn’t work, OPEC+ could always rethink its current course. Key ministers from the coalition will hold a monitoring meeting on Aug. 18.
“If oil prices suddenly do tank to the low $30s or something, that would not be tolerable for Riyadh,” said Tonhaugen. “If there is this glut in the next month or two, we might see OPEC+ throttle back a little bit.”
--With assistance from Anthony Di Paola and Julian Lee.
To contact the reporter on this story:
Grant Smith in London at gsmith52@bloomberg.net
To contact the editors responsible for this story:
James Herron at jherron9@bloomberg.net
Christopher Sell
12
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Blockchain Demands Attention in Oil and Gas
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Oman Sees Increasing Ship-to-Ship Transfers of Russian Oil Bound for India
- CNPC Opens Sea-Land Oil Storage and Transport Facility in Bangladesh
- US Govt Makes Record Investment of $6B for Industrial Decarbonization
- Perenco Still Searching for Missing Person After Platform Incident
- Eni, Fincantieri, RINA Ink Deal on Maritime Decarbonization
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Oil Falls as US Inventories Increase
- Czech Utility CEZ Bucks Weaker Prices, Demand to Log Record Annual Profit
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call
- India Halts Russia Oil Supplies From Sanctioned Tanker Giant
- Centcom, Dryad Outline Recent Moves Around Red Sea Region
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- PetroChina Set to Receive Venezuelan Oil
- Czech Conglomerate to Buy Major Stake in Gasnet for $917MM
- US DOE Offers $44MM in Funding to Boost Clean Power Distribution
- Oil Settles Lower as Stronger Dollar Offsets Tighter Market
- UK Grid Operator Receives Aid to Advance Rural Decarbonization
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call