by Olesya Astakhova and Ahmad Ghaddar
LONDON/MOSCOW (Reuters) – The global oil market is likely to run a bigger-than-expected surplus this year as rising energy prices and tighter monetary policies are dampening demand, it said. ‘OPEC+ in a report published on Wednesday.
This report is published five days before the next meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies and a little more than a week after the declarations of Saudi Arabia on the advisability of a reduction from production.
The Joint Technical Committee (JTC), which meets on Wednesday, is responsible for advising OPEC+ strategy officials on global market fundamentals.
Five sources close to the organization told Reuters that discussions on changing its production policy beyond September had yet to begin.
Last week, the Saudi Minister of Energy, Prince Abdulaziz bin Salman, assured that OPEC + was ready to reduce its pumping in the face of the volatility of oil prices.
His remarks helped the price of Brent crude rebound to over $105 on Monday, its highest level in a month, but the market price fell back to around $96 on Wednesday as traders anticipated lower demand.
At its last meeting, OPEC+ had decided to increase its production by 100,000 barrels per day (bpd) in September.
The JTC report says it expects global demand to increase by 3.1 million bpd this year but underlines the uncertainties linked to inflation and the tightening of monetary policies, two factors that are cutting into consumers’ purchasing power.
“Rising energy prices are another risk for the future,” he adds. “This could lead to a greater reduction in consumption than currently anticipated, especially at the end of the year.”
According to the report, the global market would be in surplus by 900,000 bpd this year, 100,000 bpd more than previously expected. And this surplus should persist next year, according to the central scenario of the committee.
(Report Maha El Dahan in Dubai and Rowena Edwards in London, French version Marc Angrand, edited by Tangi Salaün)
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