The Organization of the Petrol Exporting Countries (OPEC) will today announce its World Oil Outlook. Amid projections of a small
The Organization of the Petrol Exporting Countries (OPEC) will today announce its World Oil Outlook.
Amid projections of a small rise in oil demand in the third quarter, the cartel increased its oil production by 160,000 bpd starting in September. However, an unexpected drop in oil prices to below $40 a barrel, a near two-month low, proved that the organisation had overestimated the speed of global economic recovery.
Today, OPEC will need to decide on whether it will continue to relax production limits as planned. What further complicates matters is that global prices have been adversely affected by increased production from members exempt from the supply cap. Shell’s first oil shipment from Libya returned the country to the oil market in early October, ending an eight month oil blockade and flooding the market with an additional 290,000 bpd.
Expect Libya’s actions to trigger other OPEC members to continue the trend. With the UAE having already surpassed set limits and Saudi Arabia planning to maximise its production before a global transition to clean energy rids oil of its worth, it will be increasingly difficult for OPEC to cut production levels, signalling a continuation of low oil prices.
Wake up smarter with an assessment of the stories that will make headlines in the next 24 hours. Download The Daily Brief.