Baku, Azerbaijan, July 6
By Leman Zeynalova – Trend:
OPEC’s decision to increase the oil production may not offset the declines especially from Iran, Venezuela (300,000 barrels per day), and most likely Libya, according to S&P analytics, obtained by Trend.
Bullish sentiment has seen the price of Brent breakthrough $80 per barrel but since retreated on the back of OPEC/non-OPEC discussion of increasing production quotas, according to S&P.
“We expect a possible 1 million barrels per day additional oil onto the market but this will take time and may not offset the declines especially from Iran, Venezuela (300,000 barrels per day), and most likely Libya,” said the analytics.
“Despite higher oil prices, demand has remained buoyant on the back of the healthy global economy and strong growth across all commodities. But the greater fear is that higher oil prices triggers a global slowdown in GDP growth.”
On a longer term basis, S&P said it expect prices to balance around $60-65 per barrel.
The 4th OPEC and non-OPEC Ministerial Meeting was held in Vienna, Austria, on June 23, 2018. During the meeting, it was decided to boost oil production, however, the volume was not specified.
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.
---
Follow the author on Twitter: @Lyaman_Zeyn