{"id":116,"date":"2025-11-01T16:29:12","date_gmt":"2025-11-01T12:59:12","guid":{"rendered":"https:\/\/asgarzade.sitedar.com\/yancotrd\/en\/?p=116"},"modified":"2025-11-01T16:30:24","modified_gmt":"2025-11-01T13:00:24","slug":"opec-plans-to-pump-more-crude-into-a-precarious-global-oil-market","status":"publish","type":"post","link":"https:\/\/yancotrd.com\/en\/2025\/11\/01\/opec-plans-to-pump-more-crude-into-a-precarious-global-oil-market\/","title":{"rendered":"OPEC+ plans to pump more crude into a precarious global oil market"},"content":{"rendered":"

LONDON (Bloomberg) \u2013 From quiet skies over Europe to sparse traffic in America\u2019s biggest cities, a recovery in global oil demand is faltering amid the resurgence in coronavirus.
\nThat poses a particularly delicate challenge for the OPEC cartel and its partners, who next week plan to resume some of the crude output halted during the depths of the pandemic.
\nWhile the alliance is eager to ramp up oil sales after successfully reviving prices, the relapse in the world economy means that extra supply is arriving at a fragile moment, and could send the market lower again.
\n\u201cWe\u2019re in quite a finely balanced place in terms of the scope to increase production,\u201d said Alex Booth, head of research at market intelligence firm Kpler SAS. \u201cYou have to have quite a bullish view on the demand recovery to be able to justify any significant increase.\u201d
\nA Delicate Balance<\/strong>
\nThe OPEC+ alliance \u2014 led by Saudi Arabia and Russia \u2014 took a record 9.7 million barrels of daily output, or roughly 10% of global supply, offline when demand plunged over the spring. They intend to restart about 1.5 million barrels next month.
\nIn theory, it\u2019s reasonable for the 23-nation coalition to open the taps a little.
\nTheir stringent cuts have almost tripled international crude prices from the lows struck in late April, lifting Brent crude futures to $43 a barrel. That\u2019s thrown a lifeline to countries reliant on energy sales to finance government spending, and companies like Exxon Mobil Corp. and BP Plc.
\nGlobal oil markets have swung into deficit after months of surplus, with demand exceeding supply in July by about 2 million barrels a day, according to Rystad Energy A\/S, a consultant based in Oslo. That\u2019s paring some of the inventory glut amassed during the first half of the year.
\nThe inventory decline for the quarter as a whole could be twice as steep, averaging 4.4 million barrels a day, even if OPEC+ revives production, according to the International Energy Agency in Paris.
\nToo Soon<\/strong>
\nYet there are signs the tightening of the market is beginning to slacken.
\n\u201cThe markets are gradually recovering, but there are two major uncertainties,\u201d Fatih Birol, the IEA\u2019s executive director, said in an interview. \u201cOne is the shape of the economic recovery globally, and in some of the key areas. And the second one is whether or not we are going to see a second wave of coronavirus.\u201d
\nThe death toll has reached a record 150,000 in the U.S., where the economy suffered its sharpest downturn since at least the 1940s in the second quarter.
\nGasoline demand remains well-below average despite even as the summer peak approaches, while data from TomTom Traffic Index show that road traffic in cities such as Los Angeles and Miami is less than half pre-pandemic levels.
\nIn Asia, countries that successfully suppressed the first wave of infections, such as Hong Kong, are struggling to contain new outbreaks.
\nAll of which is keeping inventories bloated. The world\u2019s largest independent oil storage company, Rotterdam-based Royal Vopak NV, says that it\u2019s 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.
\nPrices 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.
\nSurplus Concerns<\/strong>
\n\u201cOPEC\u2019s experiment to increase production could backfire as we are still nowhere near out of the woods yet in terms of oil demand,\u201d said Bjornar Tonhaugen, the consultant\u2019s head of oil markets. \u201cThe balances look to be heading towards a mini supply glut for the next three to four months.\u201d
\nSaudi 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\u2019s habitual quota cheats, like Iraq and Nigeria, to refrain from increasing production now as a gesture of atonement.
\nIf that doesn\u2019t work, OPEC+ could always rethink its current course. Key ministers from the coalition will hold a monitoring meeting on Aug. 18.
\n\u201cIf oil prices suddenly do tank to the low $30s or something, that would not be tolerable for Riyadh,\u201d said Tonhaugen. \u201cIf there is this glut in the next month or two, we might see OPEC+ throttle back a little bit.\u201d
\nPublish Date : 2020\/08\/16<\/p>\n","protected":false},"excerpt":{"rendered":"

LONDON (Bloomberg) \u2013 From quiet skies over Europe to sparse traffic in America\u2019s biggest cities, […]<\/p>\n","protected":false},"author":2,"featured_media":41,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-116","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/yancotrd.com\/en\/wp-json\/wp\/v2\/posts\/116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/yancotrd.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/yancotrd.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/yancotrd.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/yancotrd.com\/en\/wp-json\/wp\/v2\/comments?post=116"}],"version-history":[{"count":2,"href":"https:\/\/yancotrd.com\/en\/wp-json\/wp\/v2\/posts\/116\/revisions"}],"predecessor-version":[{"id":119,"href":"https:\/\/yancotrd.com\/en\/wp-json\/wp\/v2\/posts\/116\/revisions\/119"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/yancotrd.com\/en\/wp-json\/wp\/v2\/media\/41"}],"wp:attachment":[{"href":"https:\/\/yancotrd.com\/en\/wp-json\/wp\/v2\/media?parent=116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/yancotrd.com\/en\/wp-json\/wp\/v2\/categories?post=116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/yancotrd.com\/en\/wp-json\/wp\/v2\/tags?post=116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}