Power Up: OPEC+’s Rock and Hard Place
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Sept 5 -By Clyde Russell
Asia Commodities and Energy Columnist
Welcome to Power Up! Crude oil prices have been hammered this week as investors focused on the threats to demand and hopes of a restoration of Libya’s output and exports. Brent futures hit a nine-month low on Wednesday, dropping to $72.35 a barrel and they are down 18% from the most recent peak in early July. The weakness is putting OPEC+ in a tight spot as the group considers whether it should proceed with its planned winding back of output cuts from next month.
OPEC+ Being Boxed In
The crude oil market may be pushing OPEC+ into a corner by hammering oil prices lower at a time the exporter group is mulling whether it should start winding back its output cuts from October. There are mixed signals coming from members of the group, which pulls together the Organization of the Petroleum Exporting Countries and allies including Russia. Some reports have said OPEC+ is now considering delaying its planned production increase of 180,000 barrels per day next month, in contrast to indications late last week that the output hikes would definitely go ahead.
The debate within OPEC+ is to be expected as the group has been consistent in saying it will monitor market developments and respond accordingly. The problem is that the market has not gone the way it was expected, with the forecast strong rise in demand, especially in Asia and led by the world’s biggest importer China, so far failing to materialise. Instead, crude oil investors have increasingly focused on the weak state of demand in Asia, and the not inconsiderable risks around economic growth in the United States and Europe. So much so that any bullish news, such as the loss of Libyan output, Houthi attacks on tankers in the Red Sea and a sharp drop in OPEC’s August output, has been ignored.
While OPEC+ members likely engage in a behind-the-scenes back and forth on what they should do in October, perhaps the views of banking giant Citi might be playing on their minds. Citi said in a client note on Wednesday that if OPEC+ doesn’t reduce output further, the average price of oil could drop to $60 per barrel in 2025 as demand declines and supply increases from non-OPEC producers. Citi said that while a technical rebound is possible, the market could lose confidence in OPEC+ defending the $70 a barrel level if the group doesn’t commit to extending current output cuts indefinitely.
Essential Reading
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A push by India to make more corn-based ethanol has turned Asia’s top corn exporter into a net importer for the first time in decades, squeezing local poultry producers and scrambling global supply chains.
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Editing by Marguerita Choy
الأصول ذات الصلة
آخر الأخبار
إخلاء المسؤولية: تتيح كيانات XM Group خدمة تنفيذية فقط والدخول إلى منصة تداولنا عبر الإنترنت، مما يسمح للشخص بمشاهدة و/أو استخدام المحتوى المتاح على موقع الويب أو عن طريقه، وهذا المحتوى لا يراد به التغيير أو التوسع عن ذلك. يخضع هذا الدخول والاستخدام دائماً لما يلي: (1) الشروط والأحكام؛ (2) تحذيرات المخاطر؛ (3) إخلاء المسؤولية الكامل. لذلك يُقدم هذا المحتوى على أنه ليس أكثر من معلومات عامة. تحديداً، يرجى الانتباه إلى أن المحتوى المتاح على منصة تداولنا عبر الإنترنت ليس طلباً أو عرضاً لدخول أي معاملات في الأسواق المالية. التداول في أي سوق مالي به مخاطرة عالية برأس مالك.
جميع المواد المنشورة على منصة تداولنا مخصصة للأغراض التعليمية/المعلوماتية فقط ولا تحتوي - ولا ينبغي اعتبار أنها تحتوي - على نصائح أو توصيات مالية أو ضريبية أو تجارية، أو سجلاً لأسعار تداولنا، أو عرضاً أو طلباً لأي معاملة في أي صكوك مالية أو عروض ترويجية مالية لا داعي لها.
أي محتوى تابع للغير بالإضافة إلى المحتوى الذي أعدته XM، مثل الآراء، والأخبار، والأبحاث، والتحليلات والأسعار وغيرها من المعلومات أو روابط مواقع تابعة للغير وواردة في هذا الموقع تُقدم لك "كما هي"، كتعليق عام على السوق ولا تعتبر نصيحة استثمارية. يجب ألا يُفسر أي محتوى على أنه بحث استثماري، وأن تلاحظ وتقبل أن المحتوى غير مُعدٍ وفقاً للمتطلبات القانونية المصممة لتعزيز استقلالية البحث الاستثماري، وبالتالي، فهو بمثابة تواصل تسويقي بموجب القوانين واللوائح ذات الصلة. فضلاً تأكد من أنك قد قرأت وفهمت الإخطار بالبحوث الاستثمارية غير المستقلة والتحذير من مخاطر المعلومات السابقة، والذي يمكنك الاطلاع عليه هنا.
