In this interview given to Lubna Bouza from SkyNews Arabia, Dr Carole Nakhle, CEO of Crystol Energy, discusses oil markets and OPEC’s decision to keep output unchanged.
According to Dr Nakhle, OPEC+’s decision on 4 March may have surprised most market observers (and even some OPEC+ ministers themselves) but all options were on the table. The interpretation of such an outcome revolves around two aspects: 1) the cautious outlook for oil demand recovery and 2) the need for higher prices.
On the demand outlook, Dr Nakhle refers to the current dominant expectations of a boom in spending in the holidays season, particulalry benefiting the travel industry with positive spillovers on jet fuels.
Although the shale industry has suffered significantly during the crisis, we simply cannot rule out an increase in production if prices maintain their ascent.
Answering the question on whether current oil prices will encourage discipline, Dr Nakhle refers to an established principle: low prices encourage discipline, high prices threaten it.
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