EnergyScan

OPEC+ maintains its output policy

Without material surprises, OPEC+ countries maintained their production policy unchanged yesterday, with 0.4 mb/d monthly production increases considered to be sufficient to respond to a market that will soon be oversupplied in Q1, according to demand estimates and seasonality. Furthermore, OPEC+ members insisted that their decisions could not be challenged by other nations outside OPEC, in clear defiance of the US and other countries prompting the group to increase production. Prices continued to weaken in this backdrop, getting closer to 80 $/b for the front-month ICE Brent contract, as buyers feared a surprise US SPR release that would temporarily oversupply the Atlantic basin market and struggle to clear, given the lack of physical demand for WAF/Urals barrels. As the Saudi Energy ministry noted, crude oil is not responsible for the global energy crisis, given its availability. On the oil side, refined product markets appear to be much tighter than crude markets. Diesel stocks outside the US continued to draw globally at a fast pace last week, with ARA stocks reduced by 0.6 mb, Singapore stocks by 1.2 mb and Japanese stocks by 0.3 mb. Diesel cracks in Europe recovered from their weekly slump after the release of ARA stocks, as low Rhine exports did not even tilt the balance materially leaving the hub undersupplied. Gasoline and naphtha stocks in the two pricing hubs ARA and Singapore are also starting to be quite low, which could further support refining margins in Asia.

Share this news :
Share on twitter
Share on linkedin
Share on email

You might also read :

ES-oil
January 6, 2021

We all like surprises

Brent prompt futures contract hiked to 54 $/b on early Tuesday, up by about 5%, as OPEC surprised market participants by reducing February output. The…
ES-economy
November 3, 2021

Markets await the Fed with an eye on China

There was little significant movement in the financial markets, although equities continued to rise, with the CAC 40 breaking its record high from the internet…
Join EnergyScan

Get more analysis and data with our Premium subscription

Ask for a free trial here

Don’t have an account yet?  Sign up here!

[booked-calendar]