according to the website - By Cryptopolitan_News
Oil supplies are continuously shrinking as OPEC+ members struggle to meet new production quotas.
OPEC+ announced an increase in production to meet the growing global demand for oil, but the barrels are not arriving. Since April, the eight largest producers in the group have been attempting to gradually increase production, aiming to boost output by 2.5 million barrels per day by September compared to March figures.
However, according to Reuters, the data shows that this increase is unattainable. Some countries cannot increase production. Others are instructed to cut production for violating rules in recent months. In any case, the result is a tight market where prices are rising rather than falling.
The group's internal sanctions system is also slowing the process. Iraq and Russia are cutting production as they previously exceeded the established limits. Kazakhstan is already pumping oil at full capacity. So far, oil futures have not fallen despite the planned increase. Instead, the price of Brent crude oil rose from $58 per barrel in April to $68 in August. Saudi Arabia is increasing production while others are holding back or working at full capacity.
Saudi Arabia has done most of the work. From April to June, eight producing countries committed to increasing production by 960,000 barrels per day. After deducting the current production restrictions, the actual target increase was 730,000 barrels per day. However, the real growth was only 540,000 barrels per day, with 70% of that growth coming from Saudi Arabia.
Exports increased by only 460,000 barrels per day from March to June. The International Energy Agency reported that global demand rose by a whole million barrels per day during the same period. Thus, demand was growing faster than supply.
According to Vortexa, supplies from Saudi Arabia alone increased by 631,000 barrels per day from March to June, while exports from Russia, Iraq, Kazakhstan, Kuwait, and Oman decreased. Although Riyadh exceeded its June quota, additional barrels were sent to storage both domestically and abroad.
Demand from China is another piece of the puzzle. It is accumulating oil. The International Energy Agency reported that China's reserves increased by 82 million barrels in the second quarter, which is nearly 900,000 barrels per day.
Refineries are operating at full capacity. Power plants in the Middle East are burning more oil for electricity production in the summer months, meaning barrels of oil are being consumed by local producers. This demand pressure helps explain why spot prices are higher than long-term contracts — the market situation is referred to as 'backwardation'. Richard Price, an analyst at Energy Aspects, noted: 'The market is still facing a supply deficit.'
Low inventories and weak exports exacerbate the situation.
The oil market continues to operate at low inventory levels. Over the past three years, OECD countries have failed to replenish their stocks. In May, inventories in Europe stood at 394 million barrels, which is nearly 9% below the five-year average.
In June, commercial crude oil inventories in the United States stood at 419 million barrels, which is also below the five-year average. OPEC+ representatives state that low oil inventories remain necessary, despite the internal problems of the group.
Summer demand is also depleting local stocks. Producers in the Persian Gulf often cut exports during the hot season to meet the increased air conditioning needs domestically. This limits their ability to ship any small additional oil they may be producing.
Russia is also not helping. Attacks on its energy infrastructure complicate production growth. Meanwhile, other OPEC+ members with limited capacity still want to receive higher quotas during OPEC+ monthly meetings not because they can use them now, but to be able to expand production in the future or negotiate future cuts.
The penalties are not going anywhere for now. Iraq, Russia, and other countries that previously overproduced are still under production restrictions. These restrictions range from 200,000 to 500,000 barrels per day per month and will be in effect at least until June of next year.
On August 3, the group approved another quota increase for September. OPEC+ countries now intend to increase production to 32.36 million barrels per day. In March, this figure was 30.80 million barrels per day. However, expectations are low.
#Сryptomarketnews , #TrumpTariffs
And there are always A LOT of fresh news in this feed (!). There has been, there is, and there will be !!!
Enjoy your viewing!
