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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    Oil Markets: OPEC+ Plans to Increase Production, Trump's Promises Spark Controversy

    Rocky
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    Oil Markets: OPEC+ Plans to Increase Production, Trump's Promises Spark Controversy Empty Oil Markets: OPEC+ Plans to Increase Production, Trump's Promises Spark Controversy

    Post by Rocky Today at 4:56 am

    Oil Markets: OPEC+ Plans to Increase Production, Trump's Promises Spark Controversy

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    Economy News - Follow-up
    [rtl]With oil demand slowing in China and supplies swelling across the Americas, delegates say the group led by Saudi Arabia and Russia is again discussing delaying its plans to boost output — perhaps by months.[/rtl]
    [rtl]But if OPEC+ wants to prevent a supply glut, it may need to do more. The International Energy Agency expects a surplus to loom next year even if the cartel scraps supply increases entirely. Citigroup Inc. and JPMorgan Chase & Co. warn that prices are already set to fall from $73 a barrel to $60 — and possibly lower — if the group opens the taps.[/rtl]
    [rtl]Any further selloff would cause financial pain for the Saudis, who have already been forced to cut spending on lavish economic transformation plans. And that’s before the oil market has even factored in the return of President Donald Trump, who has promised to boost U.S. crude production and threatened to impose punitive tariffs on China.[/rtl]
    [rtl]“I think there is no room for them to increase and the market will remind them of that when it is necessary,” Torbjorn Tornqvist, co-founder and chief executive of Gunvor Group, said at the Energy Intelligence Forum in London on Tuesday.[/rtl]
    [rtl]Earlier in the day, Saudi Energy Minister Prince Abdulaziz bin Salman met with Russian Deputy Prime Minister Alexander Novak and Iraqi Prime Minister Mohammed Shia al-Sudani in Baghdad. They discussed the importance of keeping markets balanced and meeting commitments to cut production, according to statements from the countries. The 23-nation alliance is scheduled to meet online on Sunday.[/rtl]
    [rtl]When OPEC and its partners last met nearly six months ago, the picture was very different. Confident that global oil consumption would continue to rise after the pandemic, the group unveiled a roadmap to restore production shut in since 2022, setting out a return of 2.2 million barrels per day in monthly instalments starting in October.[/rtl]
    [rtl]But things have changed since then.[/rtl]
    [rtl]Brent crude futures have fallen about 17% since early July, shrugging off the Middle East conflict, while demand in China has contracted for six straight months as it grapples with a host of economic challenges. According to the International Energy Agency, Chinese consumption — which has supported oil markets for the past two decades — may have already peaked.[/rtl]
    [rtl]The Paris-based agency expects global oil demand to grow next year by about 1 million barrels per day — less than half the rate seen in 2023 — as the shift from fossil fuels to electric vehicles accelerates.[/rtl]
    [rtl]This rise will be offset by a surge in new supplies from the United States, Brazil, Canada and Guyana, leaving a surplus of more than 1 million barrels per day, she said.[/rtl]
    [rtl]“The oil market looks set for a significant surplus in 2025,” said Martijn Rats, an analyst at Morgan Stanley.[/rtl]
    [rtl]The tense outlook for OPEC+ comes even before oil markets absorb the impact of a second term for Trump, who has promised that the US oil industry will “drill, baby, drill” and warned of savage trade tariffs on a number of countries, including China.[/rtl]
    [rtl]Iran and China[/rtl]
    [rtl]However, forecasts can often be wrong, and if oil markets defy bearish expectations, this would make OPEC+’s job easier.[/rtl]
    [rtl]Global oil demand continues to surprise and looks set for strong growth over the next five to 10 years, BP Chief Executive Murray Auchincloss told a conference in London on Monday.[/rtl]
    [rtl]Oil prices are currently trying to “price in a future supply surplus that hasn’t arrived yet,” said Jeff Currie, chief strategy officer for energy tracks at Carlyle Group. The price decline is already eroding the outlook for supply growth, making a surplus less likely.[/rtl]
    [rtl]“Almost all bear markets are demand driven, and with China using stimulus, the chances of an unexpected demand shock are limited,” Corey said.[/rtl]
    [rtl]There is also the possibility that Trump will renew the “maximum pressure” campaign he used to choke off crude oil exports from Iran during his first term, in an attempt to curb the country’s nuclear program.[/rtl]
    [rtl]“If the current Trump administration were to cut Iranian oil exports by 1 million to 1.2 million barrels, that would eliminate the oversupply next year,” said Bob McNally, founder of Rapidan Energy Group and a former White House official. “That would make it much easier for OPEC+ to bring those barrels back.”[/rtl]
    [rtl]But in the absence of a tough crackdown on Tehran, OPEC+ countries may need to persevere with their cuts. That will be a challenge for several members — notably Iraq, Russia, Kazakhstan and the United Arab Emirates, which have struggled to implement supply curbs they were supposed to impose at the start of the year.[/rtl]
    [rtl]The UAE is allowed to gradually add an additional 300,000 barrels per day of production in recognition of recent increases in its production capacity. Kazakhstan is not allowed, as the start of a major expansion at its Tengiz oil field could test its commitment to the OPEC+ deal next year.[/rtl]
    [rtl]The longer the surplus lasts, the more likely OPEC+ members will eventually tire of quotas and return to chasing individual market share, as they did during policy “resets” in 2014 and 2020, said Natasha Kaneva, head of global commodities research at JPMorgan.[/rtl]
    [rtl]“Increasing oil production could become a key consideration for some OPEC members in 2026,” she said, when “there is an increased risk of the market resetting again.”[/rtl]


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