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OPEC’s decision to keep output unchanged and oil markets outlook

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.

Dr Carole Nakhle (right) discussing oil markets and OPEC's decision to keep output unchanged in an interview given to Lubna Bouza (left) from SkyNews Arabia

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.

Related Analysis

New Opportunities 2021: Some optimism for oil markets“, Dr Carole Nakhle, Feb 2021

Related Comments

Global Economy and Energy Markets Weekly Commentary – 7th Mar ’21“, Christof Rühl, Mar 2021

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