Novak's statement casts doubt on the absorption of more oil by the global market, while the OPEC+ group continues to carefully evaluate production.
In a recent interview, Russian Deputy Prime Minister Alexander Novak stated that It is premature to predict whether the global market will need additional oil volumes from December. The statement comes amid discussions about the next steps for the OPEC+ group, made up of oil-producing countries including Russia and Saudi Arabia.
The current uncertainty surrounding oil demand is a concern for the OPEC+ group, which has already committed to significant production cuts. The current reduction stands at around 5,86 million barrels per day, or about 5,7% of global demand.
OPEC+ group had planned to increase oil production
The group had planned to increase production by 180 barrels of oil per day, but the decision was delayed due to the recent drop in oil prices, further raising caution.
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“It is still too early to make any decision on whether or not to increase oil production,” Novak said, stressing that the situation needs to be monitored on a daily basis. The uncertain scenario includes factors such as the economic slowdown in regions such as China and North America, in addition to the demand for oil that tends to be lower in the fall and winter.
Will the market be able to absorb extra volumes?
The increase in demand this year, which has reached 1,8 million barrels per day, does not yet give clear signs that the market will be able to absorb additional volumes of oil, as some expect. The next semiannual summit of the OPEC+ group, scheduled for December 1, will be crucial to discuss these issues and decide the direction of production for the coming months.
“We are ready to adjust production as needed,” reinforced the Minister of Energy of Saudi Arabia, Prince Abdulaziz bin Salman, confirming the flexible stance of OPEC+.
The question that remains is: Will the global market be prepared for additional oil volumes or will the uncertainty scenario persist? Share your opinion in the comments!