Last night, the OPEC+ Joint Ministerial Supervision Committee recommended that OPEC continue to increase production as originally planned, and New York crude oil futures surged to the highest level since 2014 on Monday. Although the natural gas crisis has boosted crude oil demand, OPEC+ still decided to gradually increase production at the established pace, increasing production by 400,000 barrels per day per month. The original plan would have dashed hopes that OPEC+ would increase production.
Some investors were surprised because the pace was much lower than previous forecasts by some investment banks. Rob Thummel, energy asset manager at asset management company Tortoise, said: “Our consensus at the time was that the production increase rate would be at least 800,000 barrels per day.”
At the same time, the world’s largest oil company Saudi Aramco said that the global natural gas shortage has led to an increase in crude oil consumption of 500,000 barrels per day; the lack of energy transition policies and investments may lead to higher oil and natural gas prices; it will focus on increasing oil production capacity in offshore areas.
The CEO of Saudi Aramco said that it will fully expand its production capacity and its production capacity will reach 13 million barrels per day by 2027. Oil demand is “very healthy” and is expected to reach 99 million barrels per day by the end of the year. Oil demand in the third quarter is expected to be 97 million barrels per day.
Goldman Sachs predicts that there will be 650,000 barrels per day of additional oil demand later this year due to energy consumption shifts.
Damien Courvalin, head of energy research at Goldman Sachs, said that oil prices have reached their highest level in seven years. Inventories are about to fall to 10-year lows, setting the stage for another significant rally.
Russian Deputy Prime Minister Novak said in a speech at the meeting that OPEC+’s agreement on Monday will continue to normalize market conditions.
Rob Thummel, portfolio manager of Tortoise, a company that manages about $8 billion in energy-related assets, said that the market had generally believed that November would temporarily increase production by 800,000 barrels per day; International Energy Agency Administrator Birol expects oil prices to fall in the coming months, bringing “good news” to the global economic recovery.
As of early morning closing today, the price of light crude oil futures for November delivery on the New York Mercantile Exchange The price of London Brent crude oil futures for December delivery rose by $1.98 to close at $81.26/barrel, an increase of 2.50%. </p
