BAKU, Azerbaijan, March 3
By Leman Zeynalova – Trend:
The main view in the market is that there will be a part roll-over of the existing agreements, with additional barrels on the market for sure, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, a partner at Dutch risk consultancy VEROCY, and Global Head Strategy Risk at Berry Commodities told Trend.
“The latter is linked to higher oil prices and perceived (!) higher demand in markets. The underlying issue of economic crisis options due to COVID is being dismissed at present, as that risks according to parties is not high enough. This option in my opinion however is a tricky one as demand in reality is still struggling, demand forecasts are too optimistic and possible negative fallout of COVID economics is high. H2 2021 doesn’t look as bright as hedgefunds etc are pertaining,” he said.
The expert believes OPEC should be very careful not to overflood markets again, as already main parties inside of OPEC and OPEC+ are vying for higher volumes and revenues.
“Looking at storage volumes they are still above what is perceived as normal levels while major volumes of petrochemicals and fuels are not taken into account also. OPEC for sure should be targeting a 0ne Voice strategy, in which the cartel is showing resolve and strength. If this is not the case, the gates of hell could be opened again.
Saudi Arabia and Russia are expected to come to terms, but this time they will be more Saudi terms than Moscow terms. Riyadh is not willing anymore to take the total brunt, and wants to monetize its assets too to the fullest. Higher prices is not all, locking in markets is a necessity for future survival too. At same time, the eyes should be put on Abu Dhabi’s ADNOC too, they are heavily investing in extra production, this will need to be put in action very soon too.
Iraq is another major hiding danger, as they need extra cash very soon. Iran is still out and is not expected to be back very soon,” he added.
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