Oil / Ope: new offer expected to cap prices below $ 100
Looking to the next century has particular implications for energy traders. Like the bubbles of a champagne flute, oil prices go up. Traders estimate when it will exceed $ 100 a barrel.
OPEC will meet this week to discuss whether to increase production. The conference coincides with the seventh anniversary of the oil crash, triggered by the cartel’s reluctance to cut production. The price of Brent has risen 48% this year to $ 76 a barrel, with hopes OPEC will pump more black products. He must limit the price before it reaches the mark of the century.
Global demand for crude oil is stronger than last year. By the end of 2022, the International Energy Agency predicts that consumption will increase by about 5% from 2020 levels to 99.5 million barrels per day.
But that was still less than two years ago. IEA statement The fact that all producers should “turn on the tap” contradicts the demands of the Moratorium on investment in new oil and gas fields. There is no price to guess which message the Opec will focus on.
There is plenty of room to increase the supply. Even including the two main members of “Opec +”, Russia and Kazakhstan, the cartel’s current production is well below pre-pandemic levels.
Rystad Energy forecasters expect production to increase by 500,000 barrels per day. Yet by half, the total production of the OPEC + group is probably 38 million barrels per day, a tenth less than last April.
Perhaps the most optimistic argument has to do with the lack of investment commitment. The world’s largest oil producers, such as BP and ExxonMobil, have cut exploration spending by 39% in the three years leading up to 2020. Given the promise of climate change, this investment will not pick up immediately. Instead, sovereign producers gain market share.
With prices and demand rising, growers will want to pump more even if they disagree this week. Unless volatile Middle East politics dictate otherwise, it should dampen prices in the second half of the year.
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Oil / Ope: the new offer should cap prices below $ 100 Source link Oil / Ope: the new offer should cap prices below $ 100