OPEC Gives Surplus Alarm, Gets Ready for Drop in Oil Prices!

Jakarta, CNBC IndonesiaThe Organization of the Petroleum Exporting Countries or OPEC predicts a global oil supply surplus to occur in early December 2021 until 2022. This assumption is based on the increase in Covid-19 cases in the European region and soaring supply which affects oil demand.

Quoted ReutersOPEC Secretary General Mohammad Barkindo said that this sign had to be responded to by the global oil market. Even so, Barkindo said that OPEC would stick to the global economic recovery and not demand speculation.

“The surplus has started in December. This is a signal that we must be very, very careful,” he said.

The Vienna-based organization cut its forecast for world oil demand for the fourth quarter by 330,000 barrels per day (bpd) from last month’s forecast. This is due to the increase in energy prices in several regions.

Meanwhile, OPEC and several of its allies that make up OPEC+ are currently still at odds with the United States (US). This is related to the US demand that OPEC + increase production more. OPEC+, led by Saudi Arabia and Russia, is currently increasing production by 400,000 barrels per day and is considered sufficient.

“That’s enough,” said UAE Energy Minister Suhail Al Mazrouei, noting that the oil market will move from a supply deficit to a surplus in early 2022 and that is one of the main reasons OPEC+ is not aggressive in production.

“What we know and all the experts in the world are saying is that we will have a surplus. So we don’t need to panic. We have to be calm,” he said.

[Gambas:Video CNBC]




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