OPEC is seriously considering limiting oil production. It’s too much on the market

According to them, the market created a surplus of oil in May and June, which they say will have to be compensated in August and September. But the OPEC+ group’s documents do not indicate how the 2.31 million barrels per day reduction in oil production should spread between countries, nor by how much production is expected to fall in August and by how much in September. It would be a further reduction in production after the OPEC+ group “sacrificed” 9.7 million barrels per day starting in May.

But limiting black gold mining is likely to be necessary. OPEC+ experts themselves expect the total drop in demand to reach more than 9 million barrels per day this year, 100,000 more than originally estimated. In an alternative scenario, an even deeper drop of 11.2 million barrels per day is foreseen. Next year, however, demand is expected to increase by about seven million barrels per day. But even this prediction is based on the assumption that there will be no massive second wave of coronavirus pandemics, and therefore it will not be necessary to quarantine large parts of the country’s economy, as it did in the spring.

 

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