In an interview given on Al Arabiya’s flagship programme ‘The Future of Energy’ presented by Mr Naser Al Tibi, Dr Carole Nakhle, CEO of Crystol Energy, discusses the outlook for oil markets.
Some of the key highlights include:
- OPEC+’s massive production cuts have succeeded in supporting oil prices recovering from their lows in April, but the wild card remains oil demand, which needs to recover fast enough to absorb the record inventories built.
- Oil demand, however, continues to be determined by the health of the global economy which remains at large at the mercy of Covid-19. Dr Nakhle therefore cautions against overly optimistic price forecasts for this year and even next, as long as the spread of Covid-19 is not effectively controlled.
- The compliance of all OPEC+ members is key for the cuts to remain effective and relevant. However, maintaining discipline within OPEC has been a lingering problem since the foundation of the organization which has survived to date because the largest producers, primarily Saudi Arabia, have subsidized the cheaters.
- Although OPEC’s compliance has improved in recent months, the ability of all members to maintain the discipline is questionable.