OPEC+ likely to roll over its current production cut at least until end-March 2021
BAKU, Azerbaijan, Nov.28
By Leman Zeynalova – Trend:
OPEC+ will likely decide to roll over its current 7.7m bpd production cut at least until end-March 2021, Trend reports citing UK-based Capital Economics consulting company.
“However, we suspect that this view is largely priced into the market. As a result, only a larger or longer production cut would give a meaningful boost to prices,” said the company.
Capital Economics estimates that energy prices rose across-the-board this week.
“Natural gas prices soared in large part because of the arrival of colder weather in the northern hemisphere. That said, the 10 percent jump in the US natural gas price was a little surprising as stocks have ticked up recently, despite lower US production. Meanwhile, European natural gas prices were in part boosted by strikes in Norway, which could negatively affect production. And finally, LNG prices are still benefitting from stronger economic growth in Asia relative to elsewhere.”
“It was also a good week for oil prices as optimism about a recovery in demand followed on the heels of news reports of effective COVID-19 vaccines. We have revised up our oil demand forecasts to reflect the likelihood that virus-related restrictions will be lifted next year. As a result, we now think that the oil price (Brent) will stand at $60 per barrel by end-2021. However, we also expect the return of some OPEC+ supply and a gradual recovery in US production, which should act as a ceiling on prices.”
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