Speculations about oil production vary, with the “OPEC +” group preparing to hold its regular meeting tomorrow, Sunday, in the Austrian capital, Vienna, to discuss possible deepening production cuts.
Reuters quoted sources as saying that “OPEC Plus” may approve a reduction of up to one million barrels per day, with oil prices falling towards the level of $ 70 a barrel, in light of the oversupply.
It is noteworthy that the coalition is currently applying cuts of two million barrels per day, in addition to voluntary cuts announced by several countries last April, amounting to 1.6 million barrels per day, and if the expected cuts are approved, the total cuts will rise to approximately 5 million barrels per day, which is equivalent to 4.5% of the total daily global demand for oil.
Goldman Sachs expects that the nine main producers in OPEC Plus – who announced voluntary production cuts last April – will continue to produce unchanged, but they resort to some hard-line statements that create a kind of balance, he added. The bank said OPEC’s high pricing power would allow the group to make additional cuts if oil prices remained below $80 a barrel in the second half of the year.
For its part, HSBC predicted that OPEC Plus would wait to see the impact of the latest series of production cuts before making any further changes to supplies.
“We still believe that OPEC+ will take a flexible approach. If the expected deficit in the summer is not realized, we may see further cuts from the group,” he added.
The bank expects that the current combination of cuts, in addition to strong demand for oil from China and the West from summer onwards, will lead to a market deficit in the second half of 2023.
Oil prices rose by more than 2% yesterday, Friday, after the US Congress approved the debt ceiling agreement, which averted government stumbling in the largest oil consuming country in the world, in addition to job data that raised hopes for a possible halt to raising interest rates by the Federal Reserve. federal.
Brent crude futures rose 2.5% to $76.13 a barrel upon settlement, and US West Texas Intermediate crude futures rose 2.3% to $71.74 upon settlement.
2023-06-03 12:47:29
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