The Organization of the Petroleum Exporting Countries (OPEC) expressed cautious optimism about the fundamental factors that will affect the oil market in 2024.
The organization said on Wednesday that the recent decline in prices was due to “exaggerated concerns” about demand, while it maintained its relatively high expectations for oil consumption in 2024.
Brent crude fell to a six-month low near $72 a barrel from a 2023 high it reached in September at about $98 a barrel.
The decline in prices has increased since the OPEC+ alliance, which includes OPEC and other allies led by Russia, announced a new round of production cuts on November 30.
But OPEC said in its monthly report that it remains “cautiously optimistic about the fundamental factors affecting the dynamics of the oil market in 2024,” explaining that speculators played a major role in pushing prices down.
OPEC said in a comment on prices in November: “The prices of crude oil futures witnessed a significant decline due to heavy selling operations in light of severe fluctuations in the futures market.”
She added: “Exaggerated fears about the growth in demand for oil affected market dynamics, which negatively affected market sentiment.”
OPEC maintained its forecast for global oil demand growth in 2023 at 2.46 million barrels per day. It also confirmed its expectations from last month for demand growth in 2024 at 2.25 million barrels per day.
OPEC continually expects stronger demand growth next year compared to the expectations of other bodies such as the International Energy Agency, although the two bodies had a similar view on demand in 2023.
OPEC+ member states have been taking a series of measures, including reducing production, since late 2022 to support the market.
OPEC indicated in its report that its oil production declined in November.
On the other hand, the Secretary-General of OPEC called on the organization’s members and partners to “preemptively reject” any agreement targeting fossil fuels in the climate negotiations at the COP28 conference, which concluded its work on Wednesday in Dubai, according to a letter seen last Friday by Agence France-Presse.
In the letter dated Wednesday and confirmed as authentic by a member country of the organization that received it, Secretary-General Haitham Al-Ghais “urged” the members of the organization and their country’s delegations to “preemptively reject any text or wording that targets energy, that is, fossil fuels, rather than emissions” of greenhouse gases.
Al-Ghais continued: “It appears that excessive and disproportionate pressure on fossil fuels could reach a turning point with irreversible consequences, as the draft resolution still includes options on phasing out fossil fuels,” stressing that he is writing “with a sense of extreme urgency.” .
The letter added: “Although Member States” and their partners “take climate change seriously (…), it would be unacceptable for politically motivated campaigns to jeopardize the prosperity and future of our peoples.”
2023-12-13 13:38:12
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