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OPEC is likely to cut production by one million to 1.5 million bpd, badysts Johannes Benigni of Austrian group JBC Energy told CNBC, adding that global oil markets are now saturated and that such a reduction would probably help the country. market to return to balance.
"The OPEC will probably manage to stabilize the oil market by choosing the right language," said Benigni. "They will indicate a reduction of between 1 million and 1.5 million euros, which will allow the market to stabilize."
It is a little surprising how much the market has turned into an excess after OPEC and Russia agreed in June to stop cutting production and start increasing prices. reached uncomfortably high levels for some major importers. This month, the three largest producers in the world broke new records, with Saudi Arabia's daily production rate exceeding 11 million bpd for the first time. Related: $ 50 oil puts shale to the test
The latest production data from the Kingdom, Russia and the United States put pressure on prices in addition to a sluggish demand outlook, and discussions on production cuts initiated by the United States. Saudi Arabia has not allowed to apply sufficient back-pressure.
Yet, if these negotiations led to the decision to start reducing, the price movement could be reversed. In addition, the glut does not affect all grades, said the president of the JBC Energy Group.
"What's really surplus is the barrels of light crude oil coming out of the US," he said. "So, hope or hope for OPEC at the moment would be that prices go down and demand can come back."
But others are skeptical that it will be so easy to do. In a note to customers, Jefferies said today, "The oil price correction has become a rout of historic proportions," Reuters said. "The negative price response is as severe as the financial crisis of 2008 and the aftermath of the November 2015 OPEC meeting, when the group decided not to act in the face of a highly oversupplied market," he said. the investment bank.
By Irina Slav for Oilprice.com
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