S&P Global Offerings
Featured Topics
Featured Products
Events
S&P Global Offerings
Featured Topics
Featured Products
Events
S&P Global Offerings
Featured Topics
Featured Products
Events
Solutions
Capabilities
Delivery Platforms
News & Research
Our Methodology
Methodology & Participation
Reference Tools
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
Featured Events
S&P Global
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
S&P Global Offerings
S&P Global
Research & Insights
S&P Global
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
About Commodity Insights
Solutions
Capabilities
Delivery Platforms
News & Research
Our Methodology
Methodology & Participation
Reference Tools
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
Featured Events
S&P Global
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
S&P Global Offerings
S&P Global
Research & Insights
S&P Global
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
About Commodity Insights
S&P Global Offerings
Featured Topics
Featured Products
Events
Support
11 Jun 2023 | 12:01 UTC
Highlights
OPEC+ will continue to be proactive, preemptive
Needs to be 'attentive' due to diverse uncertainties
Focus on doing job of 'market regulator'
OPEC and its allies are in "a state of readiness" amid a divergence between the physical and futures oil markets, which has prompted the 23-member alliance to take decisions that are preemptive, precautionary and proactive, Saudi Arabia's energy minister said June 11.
"I think the physical market is telling us something, I think the futures market is telling us something else," Prince Abdulaziz bin Salman told the Arab China Business Conference streamed live from Riyadh.
"It is matter of being in state of readiness. That's why we keep taking these precautionary measures. It is part and parcel of what we call being proactive and pre-emptive."
OPEC+, which is currently trimming its output by 2 million b/d, extended the deal until the end of 2024 following a June 4 meeting, a decision which Prince Abdulaziz dubbed "precautionary."
Saudi Arabia also will cut its crude output by an extra 1 million b/d for at least July on top of its existing production cuts, deemed a "Saudi lollipop" as a sweetener to fellow producers, Prince Abdulaziz said after the meeting.
Nine OPEC+ members, including Saudi Arabia, which had pledged voluntary additional cuts totaling some 1.7 million b/d starting May, will maintain these cuts through the end of 2024.
OPEC+ has to be "attentive" because it is dealing with "uncertainties and sentiment" that are working against the alliance and some of these uncertainties are "diverse" and "overinflated," Prince Abdulaziz said.
Brushing off criticism of the latest OPEC+ decisions, Prince Abdulaziz said he tolerates "all mockeries," adding "I am much more interested with my colleagues in OPEC+ to do the job of being a proper regulator."
Oil prices have barely moved since the outcome of the OPEC and OPEC+ meeting held in Vienna. Platts -- part of S&P Global Commodity Insights -- assessed Dated Brent at $75.68/b on June 9, compared with $76.06/b on June 2 before the Vienna meetings.
OPEC+ ministers are not scheduled to convene again until Nov. 26 to review market conditions and adjust quotas as needed, but its nine-country monitoring committee co-chaired by Saudi Arabia and Russia will meet bimonthly.
The extended cuts into 2024 will likely lead to higher prices, but the world also needs to weigh Chinese demand, which is the main uncertainty for markets right now, the executive director of the International Energy Agency, Fatih Birol, said June 5.
Seasonal consumption patterns typically see a rise in global oil demand as the weather warms, while China's halting recovery from the pandemic is forecast by many analysts to gain steam in the second half of the year, so the ongoing OPEC+ supply restraint could tighten the market in the months ahead.
The US Energy Information Administration has also raised its pricing outlook and changed its demand forecasts for crude and oil products following the decision to extend OPEC+ cuts decision and expected lower US GDP growth.
The EIA now sees Brent crude in 2023 averaging $79.54/b, up 89 cents from its prior estimate, and it boosted its 2024 outlook for Brent by $9.04 to $83.51/b, the agency said June 6.
Similarly, the EIA forecast WTI crude would average $74.60/b in 2023, up 98 cents from last month's estimate for the year, while it raised by $9.04 its WTI estimate for 2024 to $78.51/b.
The OPEC+ alliance pumped 41.33 million b/d in May, the start of some 1.7 million b/d in voluntary cuts from nine countries, including Saudi Arabia, according to the latest Platts survey by S&P Global.
Despite the extension of OPEC+ cuts, the alliance's collective production in May was 3.353 million b/d below quotas, the largest shortfall in the history of the alliance, according to the survey.
The May voluntary cuts mean that the gap between OPEC+ output and quotas has ballooned, with 19 members with quotas having a collective compliance rate of 192.39% compared with targets agreed under the agreement.