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OPEC+ sticks to previously agreed oil supply hikes

In this interview with Nour Amache from Asharq Business Bloomberg, Dr Carole Nakhle, CEO of Crystol Energy, discussed the 1st of September OPEC+ meeting whereby the producers’ group decided to stick to the previously agreed supply hikes (by 0.4 Mb/d monthly between September and December).

According to Dr Nakhle, such a decision was not surprising because market fundamentals have not drastically changed and are expected to follow the same path until, at least, the end of the year. She further added that, despite daily movements, oil prices have come a long way since the beginning of the pandemic and that itself is a milestone and largely due to the efforts of OPEC+.

On the possible impact of weather such as Hurricane Ida, Dr Nakhle argued that such supply disruptions, if they occur, will not have the same effect as we saw, for instance, with hurricane Katrina in 2005. A key difference is that markets today have a substantial safety cushion in the form of OPEC spare capacity.

She also addressed the issue of slowing economic growth in China. Dr Nakhle first emphasised on the global status of China, as the second biggest oil consumer and second biggest economy in the world (both after the US). Hence, any changing dynamics in the country will definitely leave its marks on oil markets, as it is partly the consequence of the Chinese government pulling out its financial support (in the form of COVID-19 stimulus packages). The question therefore becomes: should we expect a similar pattern in other major economies?  Should there be a major slowdown, oil markets will undoubtedly be affected. 

Taking a peek into 2022, Dr Nakhle expects that oil markets will face some interesting dynamics as new supplies hit the market – not just from the US but also Guyana, Brazil and even Iran.

Watch the discussion:

Related Comments

OPEC+ Sees 2021 Oil Deficit, 2022 Surplus“, Christof Rühl, Sep 2021

Global oil markets feel the impact of Hurricane Ida“, Dr Carole Nakhle, Aug 2021

US to sell part of its Strategic Petroleum Reserve“, Dr Carole Nakhle, Aug 2021

Global Economy and Energy Markets Weekly Commentary – 29th Aug ’21“, Christof Rühl,  Aug 2021

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