Despite tightened budgets, frontier drilling…
In contrast to other lithium…
The OPEC+ group may need to make additional oil production cuts to offset growing supply from the United States that has exceeded expectations, hedge fund manager Pierre Andurand told Bloomberg television in an interview on Wednesday.
“Demand growth is very strong, despite all the fears of a really weak macroeconomic outlook,” Andurand told Bloomberg.
“Supply has been the issue, a lot more supply than expected.”
U.S. oil production has been breaking records in recent weeks, exceeding earlier forecasts.
According to Andurand, America’s oil production has grown in 2023 by 700,000 to 800,000 barrels per day (bpd) more than expected.
Due to higher output in the U.S. and other non-OPEC+ producers, the OPEC+ alliance may need deeper cuts to offset the higher-than-expected supply to the market, the hedge fund manager told Bloomberg.
When OPEC+ producers meet next week – after postponing this weekend’s meeting to November 30 – they may need to discuss and announce deeper production cuts next year, Andurand says.
“The Saudis will probably want the other countries to cut as well” to help support oil prices, he added.
Yesterday, Toril Bosoni, the Head of Oil Industry and Markets Division at the International Energy Agency (IEA), said that the current oil market deficit will turn into a slight surplus next year even if OPEC+ leaders Saudi Arabia and Russia extend their cuts into 2024.
Just last week, the IEA raised its global oil demand forecasts for 2023 and 2024, as consumption is exceeding expectations. But the agency warned that supply growth was also topping forecasts.
“For now, with demand still exceeding available supplies heading into the Northern Hemisphere winter, market balances will remain vulnerable to heightened economic and geopolitical risks – and further volatility ahead,” the IEA said.
A deeper OPEC+ group cut combined with the Saudis and Russians rolling over their voluntary reduction would wipe out the currently expected market surplus in the first quarter of 2024, ING strategists Warren Patterson and Ewa Manthey wrote on Monday.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com