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OPEC oil output could rise by 1 million b/d

Oil&Gas Materials 25 May 2018 19:04 (UTC +04:00)

Baku, Azerbaijan, May 25

By Leman Zeynalova – Trend:

Oil prices registered their first fall in over a month this week as OPEC said that it will consider increasing output at its next meeting in June, the UK-based Capital Economics consulting company said in its analysis.

“Members of the group are currently under-producing their individual quotas by about 1 million barrels per day in total. Admittedly, most of this is involuntary cuts by Venezuela. But the rest of OPEC could quickly boost production by between 0.3-0.4 million bpd without any amendments to the deal,” said the company.

What’s more, the analysts believe that if OPEC decides to redistribute Venezuela’s quota between the rest of the group then output could rise by up to 1 million bpd.

“Elsewhere, the sharp drop in US stocks of natural gas finally seems to be having an impact on prices which have risen by almost 10% since the start of May. The last time stocks were this far below their five-year average, prices were above $5 per mBtu compared to just $3 now. The slow response of prices to the stock drawdown can probably be explained by the ongoing surge in US production,” said Capital Economics.

Earlier, OPEC and several other non-OPEC producers reached an agreement to extend the production deal for a further nine months. This would shift the expiration date of the agreement from March to the end of 2018. The agreement is on the same terms as those agreed in November last year.

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