• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 1 hour GREEN NEW DEAL = BLIZZARD OF LIES
  • 21 hours Could Someone Give Me Insights on the Future of Renewable Energy?
  • 21 hours How Far Have We Really Gotten With Alternative Energy
  • 22 hours The United States produced more crude oil than any nation, at any time.
  • 4 hours Bankruptcy in the Industry
  • 20 hours "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)

OPEC+ Cut Makes Oil Balance Look “Insanely Bullish” For Later This Year

The surprise OPEC+ cuts are making oil balances look “insanely bullish” for later this year, provided that the global economy holds up, Amrita Sen, founder and director of research at Energy Aspects, told CNBC on Monday.

On Sunday, OPEC+ members, led by Saudi Arabia and other major Middle Eastern producers, announced a fresh combined cut of 1.16 million bpd until the end of this year, on top of Russia's announcement that its own 500,000-bpd cut until June would be extended to the end of 2023, too.  

Saudi Arabia will cut 500,000 bpd of its production starting in May and is joined by OPEC heavyweights Iraq, the United Arab Emirates (UAE), and Kuwait, plus OPEC’s Algeria and Gabon, and non-OPEC Oman and Kazakhstan.

Prices rallied on the news on Monday morning, and the U.S. benchmark WTI Crude bounced back to above $80 per barrel.

The latest cuts come on top of the 2 million bpd cut announced in October 2022 and running through the end of 2023.

All those cuts are expected to tighten the market further in the second half of the year. Tightening was already evident in some counter-seasonal drawdowns in March, Energy Aspects’ Sen told CNBC today.

“The pure oil market fundamentals are not bullish, but they are ok,” Sen added.

But as long as the economy is holding up – and that’s a big ‘if’ – and Energy Aspects already has a mild recession baked in, then “it is looking a very, very bullish second half of the year,” she noted.

Asked if we will see oil at $100 this year, Sen told CNBC “I absolutely think we will see a $100 oil, yes.”

Hours after OPEC+ announced the new cuts, Goldman raised its Brent Crude forecast to $95 from $90 at the end of the year. The bank also raised its Brent Crude forecast for 2024, now seeing it at $100 at the end of the year from an earlier projection of $97.     

ADVERTISEMENT

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • George Doolittle on April 03 2023 said:
    See how well Slumberger and Hess now execute in response. The USA remains flooded with energy product.

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News