Today, US oil WTI fell 0.6% and traded at US $45.52/barrel, while international Brent oil price rose 0.6% and returned to above US $48.
In March this year, Saudi Arabia and Russia tried to fight a big crude oil price war, but OPEC + chose unity against the background of global economic stagnation and sluggish oil demand caused by the epidemic. In May, OPEC + started the largest scale production reduction of 9.7 million barrels per day. In August this year, the scale of production reduction was narrowed to 7.7 million B / D, and from January next year, the original plan was to narrow it to 5.7 million B / D, that is, the daily output of the ally increased by 2 million B / D, accounting for about 2% of the global demand before the epidemic.
Saudi Arabia has long been considering delaying its production increase schedule in January next year, according to people familiar with the situation. At the beginning of this month, some OPEC members also began to debate whether a new round of production reduction should be carried out to support oil prices, with the second recurrence of the new outbreak in Europe and the United States.
However, the international oil price rose along with the optimistic news of the candidate vaccine for the new crown. This month, it has risen by 25%, and has repeatedly broken the eight month high since March this year. Brent oil price has again pushed up to the psychological level of $50, which has strengthened the support for increasing production.
Saudi Arabias traditional Gulf ally, the United Arab Emirates, has actively called for more production and even threatened to reconsider its membership in OPEC. It is said that the country has recently invested in new production facilities, hoping to profit from the rise in oil prices. This week, leaders in Nigeria and Iraq said they were impatient with the measures to reduce production, and Nigeria cited domestic economic pressure to increase production quotas.
The analysis points out that the key obstacle to the OPEC + agreement is that some countries have not made enough efforts to reduce production compliance in the past. Saudi Arabia and the United Arab Emirates may ask Russia, Iraq and Nigeria to increase production reduction in the first quarter of next year to make up for the gap caused by non-compliance. It is reported that Saudi Arabia and Russia will try to resolve their differences on compliance issues in technical meetings on Saturday and bilateral talks at the weekend.
According to a confidential assessment within OPEC, maintaining the current scale of production reduction will help to reduce the global oil surplus, and the planned increase in production will bring about a new round of oversupply threat. However, in addition to the extension of the agreement, OPEC may give up seeking to increase production cuts.
Prior to this, christyyan Malek, head of oil and gas research at JPMorgan Chase, predicted that OPEC + would postpone its production increase plan by up to six months, and that Saudi Arabia might provide more voluntary production cuts by March next year, mainly because the decline in oil and refined oil storage is not as fast as expected. Barclays also believes OPEC + will delay its production increase plan by three months. Goldman Sachs seems to support the view of extending the existing production reduction agreement for half a year, but analysts of the bank published a research paper on Tuesday to look down on the future and goals of OPEC + organization. The reason is that Saudi Arabias Gulf ally UAE is not satisfied with the production reduction measures and wants to reconsider its membership of OPEC. However, katel left OPEC last year, and the increase in production of member countries Iraq and Libya has trapped the organization This ultimately reflects the arduous dual task that OPEC + is trying to fulfill: to help rebalance the market after unprecedented demand shocks, but also to achieve higher oil sales revenue and market share in the medium term. Source: Wall Street news editor: Wang Xiaowu_ NF
Prior to this, christyyan Malek, head of oil and gas research at JPMorgan Chase, predicted that OPEC + would postpone its production increase plan by up to six months, and that Saudi Arabia might provide more voluntary production cuts by March next year, mainly because the decline in oil and refined oil storage is not as fast as expected. Barclays also believes OPEC + will delay its production increase plan by three months.