OPEC+ countries met yesterday and agreed again to scale back oil production. Starting in January, production will be down 1.39 million barrels per day. Saudi Arabia also announced another one million barrel production cut in July. Public affairs energy economist Hans van Cleef doesn’t expect it to do much for the price at the pump.
According to Van Cleef, the main discussion has been on what to do in 2024, especially on production quotas for African countries. These countries are allowed to produce more than they actually do, but have problems maintaining their level of production. And this while other countries like the UAE have the capacity, but are close to their share.
“I don’t expect it to do much for the price”
sweetener
Saudi Arabia has invented an extra million barrels of sweetener, but only for the month of July. According to Van Cleef, this is a signal to the United States that it really needs to invest more in that sector. “That price has to go up to keep production levels high to meet future oil demand.”
No price increase
Van Cleef doesn’t think these decisions will do much for what needs to be paid at the pump. Previously it was decided to cut 1.66 million barrels until the end of the year, according to Van Cleef the current production cut is already included in the price. ‘The 1.4 actually replaces the 1.6, so it’s almost going to continue next year. So in that sense I don’t expect it to do much for the price.’
However, Van Cleef has a caveat. ‘We are now approaching a recession, which means that oil demand is declining slightly. But the expectation of all major research institutes is that the recession will end at some point and that demand for oil will recover. Particularly from the third quarter and certainly in the following year.’
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
