Oil glut ahead ?: After the agreement between OPEC and OPEC +: This is what experts now expect for oil prices | message
Raw materials in this article
Agreement to expand production has lowered oil prices
Experts do not expect an oil glut
However, short-term fluctuations are possible
The world economy is recovering and the alliance is reacting: After tough negotiations, OPEC and OPEC + agreed on the weekend to increase daily production by 400,000 barrels. In the past few weeks, an internal dispute had weighed on the actions of the oil cartel and delayed an agreement. It was primarily about funding quotas, on which Saudi Arabia and the United Arab Emirates could not agree. Oil prices came under significant pressure after the agreement was announced, but showed slight signs of recovery the following day.
Analysts do not expect an oil glut
Ed Morse, who is the global head of raw material research at Citigroup, does not believe that an expansion in oil production will lead to an oil glut and put oil prices under massive pressure in the future. In an interview with “Bloomberg TV” he stated that the announced increase in supply by 400,000 barrels a day would turn out to be meager. Although the COVID 19 pandemic is exploding in parts of the world, the demand for oil is “significantly higher,” according to the expert. In his opinion, oil prices can be expected to rise significantly by the end of summer.
Vandana Hari, the founder of Vanda Insights in Singapore, who announced just a few weeks ago that investors might be too optimistic about the recovery in the markets, has also welcomed the decision of OPEC and OPEC +. The deal proves that OPEC + is not only very intact, “but is also on the right track to manage a controlled and careful reduction in cuts in order to avoid even the slightest risk of an oversupply on the market,” said the expert from Bloomberg quotes.
Short-term oil price fluctuations are possible
In view of the agreement between OPEC and OPEC + on an increase in production, the experts at Goldman Sachs also do not expect an oil glut on the market. In a note to customers, Damien Courvalie said the increase in production was “moderate” and would keep the market in deficit. Goldman Sachs strategists do not believe the OPEC + deal will have a negative impact on oil prices, “as supply increasingly becomes the source of the upward momentum and signs of supply bottlenecks outside of OPEC in the months ahead  probably “, quoted” MarketWatch “from the message of the raw materials experts.
In the short term, however, given the concerns about the delta variant of the corona virus, fluctuations in the market are to be expected, according to the Goldman Sachs team of analysts.
Eugen Weinberg, who works at Commerzbank as head of raw materials analysis, made a similar statement the day before. He explained to tagesschau.de the price reductions in the meantime by saying that “more oil will flow onto the market in the short term”. Nevertheless, this comes at a time when demand is also recovering due to the global economic recovery, at the right time, commented the expert. In his opinion, a trend towards cheaper oil and a slight relaxation on the oil market can be expected. “This is basically good news for the consumer.”
In the coming year, however, the oil price could still be charged, since “more raw material from Opec plus is now available in the long term” and it is unclear “whether the market needs this additional oil”.
Daniel Hynes, Senior Commodities Strategist at the Australia & New Zealand Banking Group, also expects discounts in the short term. “The agreement reached over the weekend will likely lead to further weakness in the short term, as investors liquidate their positions due to the prospect of a higher offer,” the expert said. However, the sale is likely to be short-lived, Hynes added.
Finanzen.net editorial team
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