After two weeks' delay, the 19 ministerial meeting between OPEC and non-OPEC oil-producing countries was finally held. Under the mediation of internal differences in OPEC+,the production reduction activities of the production reduction alliance were determined from August, and a road map was drawn for the subsequent comprehensive lifting of the production reduction agreement.
"OPEC+"reached an agreement to gradually increase production, which directly led to a decline in international oil prices, which fell by 6 percentage points at the close. 19. Coupled with the recurrence of the epidemic, the supply and demand prospects of the market are more and more confusing.
The production reduction will end as soon as next September.
After the outbreak of COVID-19 epidemic, the daily output of OPEC+oil decreased100000 barrels. With the relief of the epidemic and the acceleration of vaccination, the output of this production reduction alliance still needs to be "restored", and it is expected to return to the pre-epidemic level before the end of next year.
According to the latest arrangement, OPEC+will increase production by 400,000 barrels per day from August until the existing production reduction ceiling of 5.8 million barrels per day is fully supplemented, that is, it will be fully restored as early as next September. This means that as early as next September, the production reduction of "OPEC+"will be completely over. At this rate, by the end of this year, the oil supply of OPEC+will increase by 2 million barrels per day.
The International Energy Agency (IEA) predicts that there will still be a gap of 6.5438+0.5 million barrels per day in the oil market in the second half of this year. As OPEC+is gradually increasing its supply, the prospect of oil supply is still tight in the short term. In this regard, "OPEC+"pointed out that supply restrictions will be gradually relaxed with the rise of oil prices when market conditions permit. However, once the epidemic is repeated, the reduction agreement will be postponed until the end of 2022.
It is reported that the next round of OPEC+production reduction meeting will be held on September 1 day. According to the news of American Consumer News and Business Channel, the gradual increase of OPEC+production will not cause a substantial increase in market supply in the short term, but it will help stabilize market expectations. The biggest variable facing the oil market is the epidemic trend.
Some member countries have increased production.
It is worth noting that it is difficult for OPEC+to reach an agreement on production reduction, because the UAE has been demanding to raise its oil production benchmark. In the end, Saudi Arabia agreed to the UAE's request, but also raised the production benchmark of OPEC+the largest oil producer to maintain the internal balance of the production reduction alliance.
According to the Financial Times, the UAE's request to raise the production benchmark has been recognized, but it is lower than its initial demand of 3.8 million barrels per day, which is the maximum production required by OPEC+.
According to the arrangement, starting from May 2022, the benchmark of four OPEC member countries and one non-OPEC oil producer will increase by a total of 654.38+63.2 million barrels per day, namely UAE, Saudi Arabia, Iraq, Kuwait and Russia. Among them, the benchmark of oil production in UAE will increase from 3 1.6 million barrels per day to 3.5 million barrels per day, the benchmark of Saudi Arabia and Russia will increase from 1.654.38+0.5 million barrels per day, and the benchmark of Iraq and Kuwait will increase to 4.8 million barrels per day and 3 million barrels per day respectively.
It is generally believed in the industry that "OPEC+"raises the production benchmark of other oil-producing countries in order to avoid a wider range of differentiation, and it is also expected that the oil demand situation will accelerate. Saudi Energy Minister Prince Aziz said that according to the latest arrangement, Saudi oil production will reach 1 1 10,000 barrels per day in the second half of next year.
International oil prices continue to fluctuate.
The fact that "OPEC+"is about to increase supply weakens the expectation of international oil price rise, and the oil price recovery that lasted for one year temporarily stagnates. The industry predicts that international oil prices will continue to fluctuate during the rest of this year.
On July 19, Brent crude oil plunged 6.8% to $68.62/barrel, and the US WTI crude oil price also fell to $66.35/barrel. Both the two international benchmark oil prices recorded the biggest decline since March.
In addition, although vaccination has accelerated and crude oil inventories in OECD countries have fallen sharply, there is still great uncertainty about the improvement of the oil demand side. It is predicted by the industry that the spread of the COVID-19 epidemic is prompting the financial market to hedge widely, and the new epidemic prevention and control measures are further threatening the oil demand.
However, large investment banks are still optimistic about rising oil prices. Morgan Stanley maintained its expectation of Brent crude oil of $80/barrel in the second half of the year; UBS believes that oil prices will remain at around $75/barrel before the end of the year; Goldman Sachs continues to raise the forecast that Brent crude oil price will rise to $82/barrel in summer and will remain in the range of $80/barrel next year.
Some insiders said that "OPEC+"has limited support to quell internal differences in the composition of oil prices. In view of the growing market concern about the COVID-19 epidemic and the rising risk aversion of investors, the international oil market is still under obvious pressure, and the price fluctuation is likely to continue for some time.