In today’s report, the OPEC + group predicted that the oil market will witness a larger-than-expected surplus this year amid pressures from rising energy costs and tightening monetary policy that pushes oil demand downward.
This report comes days before the meeting of the “OPEC +” alliance on the fifth of September, and a week after Saudi Arabia announced that the organization may reduce oil production.
The report of the Technical Committee said that the demand for oil, which it expects to increase by 3.1 million barrels per day this year, faces great uncertainty, especially in light of high inflation and tightening monetary policy that undermines consumers’ budgets.
It added, “The rise in energy prices poses another danger in the future…and may lead to a significant reduction in consumption more than what is currently expected, especially towards the end of the year.”
A report by the committee, seen by Reuters, showed that the oil market surplus this year amounted to 900,000 barrels per day, 100,000 barrels per day more than its previous forecast.
The committee expects the oil market to achieve a surplus of 3.1 million barrels per day in September, to decrease to 600,000 barrels per day in October before rising to 1.4 million barrels per day in November.
The committee’s report showed that “OPEC +” also expects a surplus of 900,000 barrels per day next year.
In addition, “Bloomberg” reported that oil prices are heading towards the third monthly decline in a row at end of August, to record the longest series of monthly losses in more than two years, reflecting the impact of the potential slowing of global growth as central banks tighten their policies, and China continues to implement its “Zero Covid” strategy to counter the outbreak of the Coronavirus.