Thursday, February 2, 2023
  • Submit news
  • Contact
  • DMCA
  • Cookie Privacy
  • Privacy Policy
  • Terms of Use
Oil Market News
  • Home
  • Marketdaily
  • Price
  • crudenow
  • Companies
  • politics
  • Gas
  • investing
  • Stock
  • OPEChot
  • brend
  • ships
Oil Market News
Home brend

Are OPEC And The IEA Right About What’s Next For Oil?

7 months ago
in brend
Are OPEC And The IEA Right About What’s Next For Oil?
Share on FacebookShare on Twitter


Both OPEC and the International Energy Agency are predicting next year’s market to be one of the tightest in recent history. According to a Financial Times post, the two bodies have based this assumption on recovering demand in China and continued growth in India. The prediction also runs counter to widespread fears of recession. With oil prices currently declining from record highs, it can be difficult to predict where the market will go next.

Demand is Predicted to Rise in Any Case

However, as Investing.com reports, it’s not that the IEA is completely ignoring those recession fears. In fact, the organization has reduced its expected increase in demand for next year specifically because of recessionary forces. That said, they are still predicting an increase in demand of 2.1M b/d – down from 2.2M b/d estimated last month. Still, after 2022’s surge in oil prices, is it even possible to determine where demand will go from here? Well, in its first forecast for 2023, OPEC said it expected average demand to rise by 2.7  million barrels a day next year. This would put estimates at roughly 103mn b/d total. The forecast is based heavily on increased economic activity and even makes light of fears that a recession would crush demand.

Latest Oil News

Saudi Arabia’s economy expands 8.7% in 2022 on oil sector boost

Saudi Arabia’s economy expands 8.7% in 2022 on oil sector boost

February 1, 2023
US oil sector sees chance to overhaul permitting – Argus Media

Activists board Shell FPSO on route to N Sea: Update – Argus Media

January 31, 2023
Naphtha crack rises as Brent falls

Naphtha crack rises as Brent falls

January 30, 2023
Fuel prices to increase by 7%-13% from February 1, 2023 – IES

Fuel prices to increase by 7%-13% from February 1, 2023 – IES

January 29, 2023

At the same time, oil production from non-OPEC countries is only expected to grow by 1.7mn b/d. This will place a heavy burden on OPEC’s 13 members, some of which (notably Nigeria and Angola) are already struggling to meet current output targets. Furthermore, Saudi Arabia is already committed to pumping 11mn b/d by August – a level of production it has never sustained for a prolonged period.

Get all the latest information on global commodities and metals. Sign up for the FREE weekly MetalMiner newsletter here. 

Not Everyone Agrees with OPEC’s Estimates

To add uncertainty to the situation, the FT stated that OPEC’s analysis might not properly account for Russia. In fact, it assumes that, despite the war in Ukraine, Russian oil output will only decrease by 200,000 b/d in 2023 to 10.4mn b/d. This is a highly uncertain figure, to put it mildly.

So, to bridge the gap between supply and demand, the FT states OPEC would therefore have to pump an average of 30.1mn b/d during the year. This, according to the cartel’s own estimate. But seasonal variations in demand mean the call on OPEC crude would reach as much as 32mn b/d in the last three months of the year. That is approximately 3.3mn b/d more than the 28.7mn b/d OPEC’s members produced in June.

Related: U.S. Rig Count Rises Despite Chaotic Week In Oil Markets

However, not everyone is quite so bullish. For instance, oilprice.com reported this week how widespread recession fears are affecting investment. The article states that hedge fund and other money managers have been quitting their oil positions at one of the fastest rates in the post-pandemic period. Indeed, they sold a total of 201 million barrels in the past four weeks. That current market view has resulted in sharp falls this week. This has left the WTI down more than 7% to below $96.50 and left Brent hovering around $100.

It’s important to note that fears of ongoing disruption in China are not constrained to oil. This past week, COVID-triggered lockdowns resulted in iron ore prices plunging on concerns of weakening Chinese demand. Many traders were shocked to see the front-month Dalian contract lose 4% in one day, dropping to just $110/mt.

Either Way, the Debate Over Oil Prices Will Resolve Soon Enough

So who is your money on? On the one hand, you have OPEC and the IEA’s optimistic view of constrained supply and rising demand. On the other hand, you have the prevailing market view. It states that recessionary pressures in the West and further lockdown-related disruption in China will hamper recovery and drastically reduce demand.

Both could be correct, of course. Perhaps the former will describe the long term while the latter describes the short term? In the end, a lot will depend on whether or not a recession takes place and its overall severity. We also have to consider China’s recovery after the October re-election of President Xi, and Russia’s ability to continue to pump and find markets for its oil.

There are too many moving pieces to call it at the moment and too much potential for volatility. Ultimately, the best advice is for exposed consumers to lock in profits whenever they can.

By Stuart Burns via AG Metal Miner

More Top Reads From Oilprice.com:





oilprice.com

Tags: ChinademandIEAIndiaoiloil marketOil PricesOPECsupplyWhats
Previous Post

Oil rises 1% as tight supply outweighs economic worries

Next Post

Crude Falls Back on Expectations OPEC+ Will Announce an Increase in Output – Barchart

Related Posts

Saudi Arabia’s economy expands 8.7% in 2022 on oil sector boost

Saudi Arabia’s economy expands 8.7% in 2022 on oil sector boost

by Oil Market News
February 1, 2023
0

Saudi Arabia’s economy grew by 8.7 per cent in 2022, boosted by a sharp increase in the kingdom’s oil and...

US oil sector sees chance to overhaul permitting – Argus Media

Activists board Shell FPSO on route to N Sea: Update – Argus Media

by Oil Market News
January 31, 2023
0

Activists board Shell FPSO on route to N Sea: Update Argus Media news.google.com

Naphtha crack rises as Brent falls

Naphtha crack rises as Brent falls

by Oil Market News
January 30, 2023
0

Asia’s naphtha refining profit margin rose on Monday after two straight sessions of losses amid weakness in crude oil prices....

Fuel prices to increase by 7%-13% from February 1, 2023 – IES

Fuel prices to increase by 7%-13% from February 1, 2023 – IES

by Oil Market News
January 29, 2023
0

The Institute for Energy Security (IES) is predicting between 7% and 13% jump in the prices of petrol, diesel and...

ExxonMobil Likely to Report Surge in Q4 Earnings

ExxonMobil Likely to Report Surge in Q4 Earnings

by Oil Market News
January 28, 2023
0

ExxonMobil's Key Stats    Q4 2022 (est)  Q4 2021  Q4 2020  Adjusted EPS  $3.27  $2.06  $0.03  Revenue  $111B  $85B  $46.5B...

Trinity To Spud Jacobin Well In Second Quarter Of 2023

Trinity To Spud Jacobin Well In Second Quarter Of 2023

by Oil Market News
January 27, 2023
0

Trinidad and Tobago-focused Trinity Exploration & Production has secured all the permits and approvals to drill the deep Jacobin prospect...

Next Post
Crude Falls Back on Expectations OPEC+ Will Announce an Increase in Output – Barchart

Crude Falls Back on Expectations OPEC+ Will Announce an Increase in Output - Barchart

Subscribe
Notify of
guest
guest
0 Comments
Inline Feedbacks
View all comments

Trend Oil News

EU awaits difficult time next year without Russian gas: Diplomat

EU awaits difficult time next year without Russian gas: Diplomat

2 months ago
Oil Prices Face Fresh Volatility With New Russia Sanctions, OPEC Decision – The Wall

Oil Prices Face Fresh Volatility With New Russia Sanctions, OPEC Decision – The Wall

2 months ago
US oil producers defy calls to open taps and tame war-driven energy prices

US oil producers defy calls to open taps and tame war-driven energy prices

6 months ago
Could Opec+ become a victim of its own success?, Energy News, ET EnergyWorld

Could Opec+ become a victim of its own success?, Energy News, ET EnergyWorld

9 months ago
Israel stocks lower at close of trade; TA 35 down 0.29% By Investing.com

Israel stocks lower at close of trade; TA 35 down 0.29% By Investing.com

6 months ago
ADVERTISEMENT
New study shows huge variation in how different oil companies manage climate

New study shows huge variation in how different oil companies manage climate

February 1, 2023

Texas Justices Consider Company’s Pause on Oil & Gas Payments

February 1, 2023

Orbital Sidekick Raises $10M Investment to Monitor Oil and Gas Industry from Space 

February 1, 2023

InPlay Oil Corp. Confirms Monthly Dividend for February 2023

February 1, 2023

US Close- Fed signals more hikes coming, Powell says disinflation process begun, ADP

February 1, 2023

Saudi Arabia’s economy expands 8.7% in 2022 on oil sector boost

February 1, 2023

Crude Oil

4 Days from Deadline, EU Fails To Agree On Russian Oil Products Price Cap

4 Days from Deadline, EU Fails To Agree On Russian Oil Products Price Cap

February 1, 2023
Oil rises after U.S. fuel stocks draw down; economic concerns loom

Oil prices settle steady on higher U.S. demand, weaker dollar

January 31, 2023
S&P 500 Down 1%; Crude Oil Drops Over 2%

S&P 500 Down 1%; Crude Oil Drops Over 2%

January 30, 2023
Russia Can’t Replace the Energy Market Putin Broke

Russia Can’t Replace the Energy Market Putin Broke

January 29, 2023

Investing

Orbital Sidekick Raises $10M Investment to Monitor Oil and Gas Industry from Space 

Orbital Sidekick Raises $10M Investment to Monitor Oil and Gas Industry from Space 

February 1, 2023
Crude Oil Shielded From Bond and Stock Market Rout

Clean-energy investing poised to top money backing oil and gas after hitting a record

January 31, 2023
Crude Oil Shielded From Bond and Stock Market Rout

The Cushing® MLP & Infrastructure Total Return Fund Announces Fund Name Change

January 30, 2023
Boeing’s 747, the original jumbo jet, prepares for final send-off By Reuters

Boeing’s 747, the original jumbo jet, prepares for final send-off By Reuters

January 29, 2023

Market

Exxon: Big Oil should invest forward, not buy back

Exxon: Big Oil should invest forward, not buy back

February 1, 2023
Mexico’s Pemex seeks more than $1bn in bond sale

Mexico’s Pemex seeks more than $1bn in bond sale

January 31, 2023
Shell launches shake-up under new chief Wael Sawan

Shell launches shake-up under new chief Wael Sawan

January 30, 2023
Big Oil’s profits juggernaut on pace to slow but not stop

Big Oil’s profits juggernaut on pace to slow but not stop

January 29, 2023

OPEC

US Close- Fed signals more hikes coming, Powell says disinflation process begun, ADP

US Close- Fed signals more hikes coming, Powell says disinflation process begun, ADP

February 1, 2023
‘OPEC does not control the price’: OPEC President | OPEC News

‘OPEC does not control the price’: OPEC President | OPEC News

January 31, 2023
OPEC+ Closely Watches Chinese Factory Data

OPEC+ Closely Watches Chinese Factory Data

January 30, 2023
Week Ahead: FOMC, BOE, ECB, OPEC, NFP and Big Tech Earnings

Week Ahead: FOMC, BOE, ECB, OPEC, NFP and Big Tech Earnings

January 29, 2023
  • Submit news
  • Contact
  • DMCA
  • Cookie Privacy
  • Privacy Policy
  • Terms of Use

© 2022 OilMarket.News

No Result
View All Result
  • Home
  • Market
  • Price
  • crude
  • Companies
  • politics
  • Gas
  • investing
  • Stock
  • OPEC
  • brend
  • ships

© 2022 OilMarket.News

wpDiscuz
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.